UK’s financial regulator, the Financial Conduct Authority (FCA), has increased its inspection of the crypto exchanges within the country, as reported by Financial Times. Per the report, there has been a 74% hike in the total number of investigations since October 2018, with the watchdog looking into 87 cryptocurrencies as of September 2019 as compared to 50 around the same time last year.
The increased probe comes after a surge in fraudulent activities in the crypto sector. The FCA estimated that the people in the UK lost a whopping EUR 27 million in 1,800 different crypto and forex scams over the past year. The alarming statistics only point out to the necessity of the aforementioned step to control the situation, atleast to some extent.
David Heffron Partner and Head of Financial Regulation at law firm Pinsent Masons LLP, said:
“The rise in investigations reflects the FCA’s increasingly hands-on and no-nonsense approach to enforcing the law in the cryptocurrency market. For cryptocurrency businesses acting lawfully, these statistics will be encouraging – they want bad actors pushed out. The FCA’s crackdown on businesses operating on its regulatory perimeter will instill a degree of confidence that products reaching consumers are less likely to be scams.”
Time and again, the FCA has showcased 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. In July 2019, the FCA proposed a blanket ban on the sale of crypto derivatives to retail consumers to avoid “sudden and unexpected losses” that might incur from these investments. Although the stringent laws may come off as extreme, the FCA has obtained results before and it is anticipated that the move will help reduce investor losses drastically.
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