Over 1,400 Cases of Unregulated Crypto-Asset Activity
The U.K. Financial Conduct Authority (FCA) has addressed more than 1,400 cases involving unregulated crypto-asset activity between January 2020 and June 2023, according to a report by the U.K. National Audit Office (NAO).
Lack of Crypto Skills Led to Delays in Registering Firms
The report highlights that a shortage of crypto skills caused the FCA to take longer than expected to register crypto-asset firms under money laundering regulations. The FCA had to supervise crypto firms starting January 2020.
Registration and Supervision of Crypto Firms
Firms in the U.K. that wish to exchange currency for crypto, vice versa, or safeguard crypto assets must register and be supervised by the FCA. Existing firms had to register by January 2021, while new firms must do so before they can operate.
Challenges Faced by the FCA
The NAO report reveals that out of the 158 applications received between 2020 and 2021, only 29 firms were successfully registered. The FCA faced delays in its work due to the need for specialist crypto skills. The report also mentions that the FCA started enforcing action against illegal operators of crypto ATMs in February 2023.
Monitoring Violations and Scams
The FCA monitors firms for violations of financial promotions regulations. The report highlights that more than 3,150 crypto-asset scams were reported in 2020, increasing to over 6,300 in 2021, and more than 3,900 in the first half of 2022. The FCA has published a public list of unauthorised firms, flagging over 300 since its release.
Hot Take: FCA’s Efforts and Challenges in Regulating Crypto-Assets
The U.K. Financial Conduct Authority (FCA) has had to address numerous cases related to unregulated crypto-asset activity. The shortage of crypto skills has posed challenges for the FCA in registering and supervising crypto firms. However, the FCA has made efforts to tackle illegal operators and monitor violations in the crypto industry. Despite delays in regulatory action, the FCA aims to maintain specialist skills to ensure effective supervision. By addressing these challenges and taking proactive measures, the FCA aims to create a safer environment for businesses and consumers in the crypto space.
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