The UK’s financial services regulator, the Financial Conduct Authority (FCA), said yesterday that 111 unregistered crypto asset firms posed a risk to consumers, per Reuters.
“We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firms, consumers,” said Mark Steward, the head of enforcement and market oversight at the FCA.
Steward was speaking at a City & Financial City’s Week event. He went on to explain that many are getting involved with crypto due to a “fear of missing out,” going as far as to say the latest craze has “tulip mania written all over it.”
The FCA’s view on crypto
Steward’s warning about unregistered crypto firms—and on crypto more generally—is in line with the FCA’s wider stance.
In January of this year, the FCA imposed a ban on trading crypto derivatives, describing said products as “ill-suited” to retail customers. The FCA said crypto products lack reliable valuations, feature a prevalence of financial crime and volatility, and in any case, retail investors lack the understanding to safely interact with such products.
Five days later, the FCA listed five—entirely reasonable—concerns about the crypto industry, with consumer protections topping the list.
In March, the FCA turned its focus to crypto’s legacy issues with financial crime, announcing that crypto firms will now be required to submit annual financial crime reports to the FCA, much like any other financial services industry.
“This policy statement proposes that additional firms and cryptoasset businesses should be brought into scope of the return based on their business activities and the potential money laundering risks,” the FCA said at the time.
The FCA’s stance may not find support among crypto’s purists, but its concerns are well founded. In May, the UK’s National Crime Agency released its annual assessment of serious and organized crime.
In that report, the NCA said that “criminal use of technology is increasing, and the use of crypto assets to launder money has increased across several crime types,” the NCA said at the time.