The Financial Times reported that the UK’s Financial Conduct Authority (FCA) has launched an inquiry into 24 “unauthorized” businesses that are involved with cryptocurrencies; additionally, they are investigating several related whistleblower reports.
Through a freedom of information request made by accountancy and consulting firm, Moore Stevens, the FCA has revealed that it is attempting to determine whether the businesses in question may be “carrying on regulated activities that require FCA authorisation”. While these aren’t formal investigations, the FCA could begin them should it discover or determine that there is a reason to.
So far in 2018, seven whistleblower reports relating to cryptocurrency have been made with no public outcomes yet. The statement mentions that there were no similar reports made between 2014 and 2017.
The United Kingdom was ranked fourth out of 48 other “crypto-friendly” nations, according to a study made by Blockshow Europe in which the UK had been praised for its “importance as a European hub for cryptocurrencies”.
The FCA does not regulate cryptocurrency exchanges, brokers or businesses, which gives them a grey area status and some freedoms. However, it has been pushed by the British Cryptocurrency Trade Association, the UK’s first self-regulatory blockchain industry trade body, to begin regulating the industry.
A brief timeline of events
In April, the FCA Business Plan 2018/19 was released with cryptocurrencies and blockchain technology receiving a fair amount of attention in the report. It did not come as a surprise considering that the UK is home to significant projects such as blockchain.com and Parity; furthermore, the self-regulatory cryptocurrency organization CryptoUK had plans to work with the UK government to assist British blockchain startups, making sure they were in compliance with AML and KYC regulations.
From this, the FCA, Bank of England and UK Treasury will be working together to publish a discussion paper which is due to be released in 2019.
Bitcoin News reported in early May that CryptoUK had also approached UK members of parliament seeking to create the appropriate frameworks for the industry to thrive in, as well as “reducing consumer risk and improving industry standards”, according to chair of CryptoUK, Iqbal Gandham.
Crypto-maturity in the UK
The FCA will “continue to monitor the appropriateness of the existing regulatory framework”, which should prove comforting to British banks who have been very wary of dealing with cryptocurrencies or businesses involved with them. This stems from the difficulties with running anti-money laundering checks on their transactions, which is something the European Union is firmly addressing.
Efforts made by the British financial watchdog and its collaborations with government branches indicate that the United Kingdom is to become a significant player in the global movement to create industry regulation frameworks and business innovations.
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