24 Crypto Companies Under Investigation, Reports UK Markets Watchdog
The United Kingdom Markets Watchdog and Regulator, the Financial Conduct Authority (FCA), responding to a Freedom of Information query for details, has confirmed they have launched investigations on 24 companies that are participating in any form on the cryptocurrencies sector in order to “determine whether they might be carrying on regulated activities that require FCA authorization”. The regulator continued by adding that should they conclude that is the case, they will take action against those firms.
The action the Authority could take ranges from publishing a warning (regarding a particular company, activity or individual) for the digital market customers on the FCA official website, to launching court action against the specific business to seize activity and freeze assets, to initiate insolvency procedures or, in the most severe cases, to ask for criminal prosecution.
The Cryptoassets Task Force, comprised of Her Majesty’s Treasury, the Bank of England and the Financial Conduct Authority, will explore and study the pros and cons of cryptocurrency trading and present its conclusions in a report to be published later this year. Its main objective is to help the UK fintech sector “grow and flourish in a regulatory climate that has broadly been supportive of blockchain technology and cryptocurrencies over the years.”
Earlier this year, while presenting their business plan, the FCA described digital currencies as an area of increasing interest for both markets and regulators worldwide. Admittedly, while the cryptocurrencies do not fall under the FCA’s scope of regulatory authority, certain ways of their usage do. Therefore, the above-mentioned report is expected to clarify which model of cryptocurrency usage falls under the Authority’s sphere of regulation and which are the companies that need to comply with FCA’s rules.
Ex-FCA chairman John Griffith-Jones described digital currencies as “alluring investments” and underlined they would cause consumer harm if not regulated: “They have all the potential of causing consumer harm unless brought within the regulatory perimeter”.