UK’s financial regulatory body Financial Conduct Authority (FCA) has revealed that the firm is conducting active investigations against 50 unregistered digital asset firms in an attempt to counter crypto frauds and scams.
‘The Financial Conduct Authority (FCA) is taking assertive action to tackle harm in the consumer investments market, as data published today shows it has stopped 1 in 4 firms from entering this market. The FCA is also urging consumers to be InvestSmart and ScamSmart, following an increase in the number of scams being reported to it’, FCA’s announcement stated.
In a report regarding consumer investments data released on March 03, 2022, the FCA shared that they have already opened over 300 cases relating to unregistered crypto businesses, many of which could possibly be scams.
Moreover, the financial watchdog announced that they received over 16,400 inquiries between April and September 2021 from the residents of the UK involving crypto-related frauds.
To address the issue, FCA said that it would implement stricter regulations for crypto companies planning to operate in the country. It has also halted a number of licence applications over the past year to concentrate on the rise of financial investment scams.
‘The FCA is drawing on all the tools at its disposal, including more assertive supervision and enforcement action, and being tougher with firms who want to operate here’, FCA executive director for markets Sarah Pritchard explained.
This move was prompted by the increasing pressure coming from UK politicians, urging the country’s regulatory bodies to crack down on crypto-related financial crimes.
‘Why are we allowing—if we are—non-compliant crypto asset businesses to trade with impunity, and when can we expect that they will be put out of business?’ Lord Browne of Ladyton expressed in the House of Peers on March 02, 2022
Other financial regulatory firms in the United Kingdom have also taken the initiative against digital asset companies suspected of illegal transactions and other crypto fraud scandals. On December 15, 2021, UK’s advertising regulator The Advertising Standards Authority (ASA) took down seven cryptocurrency-related marketing campaigns for failing to explain the risk that comes with crypto investments, exploiting consumers’ inexperience in the field.
‘The ads were addressed to a general audience and we considered that most of those who engaged in a promotion linked to buying pizza were likely to be inexperienced in their understanding of cryptocurrencies and the risks inherent in doing so’, the ASA said.
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