UK’s Financial Conduct Authority (FCA) is now investigating 50 cryptocurrency-related businesses on suspicion of operating without a license, as reported by The Telegraph.
The news comes from a Freedom of Information request by The Telegraph, with the FCA telling about number of suspects it has who might be violating financial laws and regulations. The number has doubled since the FCA last reported in May.
The investigations are increasing at a time when the UK is seriously considering a systematic approach to the local cryptocurrency industry. The news outlet referred to an accountant who was of the opinion that the current falling prices in the crypto market might be responsible for the high number of investigations. Only a week ago, FCA executive director of strategy and competition, Christopher Woolard said, “We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”
Moore Stephens partner Andre Jacobs said, “The huge sums lost as a result of cryptocurrency prices falling this year will have triggered a rash of complaints to the FCA… Now that prices have collapsed, fraud is likely to be exposed, with greater pressure coming to bear on the FCA to ensure that this market can operate transparently and fairly.”
The FCA has already revealed its intention to be tough on the cryptocurrency market since digital money is a part of the financial market and subject to the same level of scrutiny. There is already a discussion on banning specific crypto financial instruments, such as Bitcoin futures. This brings a lot of uncertainty as that product is operating successfully in other parts of the world. With the market players not sure on what product or instrument will be banned, it is starting to shake the confidence of investors.
Some parties have spoken out against the heavy-handed approach, calling it a “blunt instrument approach”.
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