FT: FCA probes and warns dozens of cryptocurrency transacting firms

The UK financial regulator is probing more than a dozen companies in connection with cryptocurrency transactions amid concerns about growing market risks. The Financial Conduct Authority confirmed it was investigating 18 businesses involved in the sale of cryptocurrencies such as bitcoin. The regulator has also issued alerts and warnings about dozens of companies suspected of cryptocurrency investment scams. It would not comment further on the companies it was still probing and declined to name them because of its ongoing investigations and commercial concerns for the businesses involved

Currently, the transfer, purchase and sale of cryptocurrencies are not regulated in the UK. However, companies that sell regulated investments with an underlying cryptocurrency element, may need FCA authorization to do so depending on their activities. As of November 12, the FCA had opened inquiries into 67 companies involved in the cryptocurrency business, according to the Sunday Telegraph, which obtained the details from the regulator through a Freedom Of Information request.

The UK government earlier this month said it “stands ready” to give the FCA more power to oversee cryptocurrency assets after MPs urged increased regulation of a “ Wild West” market where investor losses and money laundering are deemed big risks. The FCA in October said it was weighing a ban on the sale of derivatives based on cryptocurrencies such as bitcoin. If it happens, this will be the regulator’s first major intervention in the market. It is also launching a consultation in early 2019 on whether and how to regulate cryptocurrencies, as well as the trading infrastructure that supports them, including crypto exchanges and digital wallet providers.

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