Financial Conduct Authority

UK FCA crypto skills gap is causing slow enforcement, says National Audit Office

The National Audit Office emphasized that it took nearly three years for the U.K. Financial Conduct Authority to address illicit activity in crypto ATMs nationwide.

The National Audit Office (NAO) in the United Kingdom has raised concerns about the effectiveness of the Financial Conduct Authority (FCA) in regulating the cryptocurrency industry.

In a recent report titled “Financial services regulation: adapting to change,” the NAO has claimed that the FCA is being slow to respond and take action against illicit activities in the crypto industry.

The NAO claims that the delay in registering crypto firms seeking regulatory approval from the FCA was attributed to the absence of specialized crypto personnel.

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UK FCA crypto skills gap is causing slow enforcement

The National Audit Office said it took nearly three years for the U.K. Financial Conduct Authority to address illicit activity in crypto ATMs nationwide.

The U.K’s National Audit Office (NAO) has raised concerns about the effectiveness of the Financial Conduct Authority (FCA) in regulating the cryptocurrency industry.

In a recent report titled “Financial services regulation: adapting to change,” the NAO claimed that the FCA is slow to respond and take action against illicit activities in the crypto industry.

The NAO claims that the delay in registering crypto firms seeking regulatory approval from the FCA was attributed to the absence of specialized crypto personnel.

Read more

UK uses Love Island star to warn finfluencers on crypto and investment schemes

The financial and advertising regulators posted a seven-part checklist to ensure these social media stars stay within the bounds of the law.

The financial and advertising regulators of the United Kingdom have teamed up to send a warning to social media “finfluencers” telling them to stop promoting illegal “get rich quick” schemes or face law enforcement.

The Financial Conduct Authority (FCA) and the Advertising Standards Authority (ACA) made reference to cryptocurrencies and nonfungible tokens in their April 6 statement, which laid out a seven-part checklist to ensure that finfluencers stay within the bounds of the law.

The checklist asks finfluencers to consider whether they’re the “right person” to be promoting the financial product and states that their followers may “lose all their money” from the investment. It also states:

“Don’t suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or FOMO.”

A seven-part checklist aims to provide “finfluencers” with more clarity over what may constitute an illegal financial promotion. Source: FCA

In addition to conducting “due diligence,” social media influences should seek approval of the FCA and ensure that the advertisement is legal, truthful and properly labeled as an advertisement under ASA rules.

The FCA and ACA strongly advised that influencers check ScamSmart to ensure that they’re not promoting an investment scam. “If in doubt, don’t promote”, the checklist’s slogan states.

It is a crime to unlawfully promote financial products or services which carries a maximum sentence of two years’ imprisonment and an unlimited fine:

“If your post breaks the rules, the ASA will take action.”

Sarah Pritchard, the FCA’s executive director, explained that there has been a spike in illegal financial promotions of late.

“They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers,” she added.

The FCA and ASA partnered with former U.K. Love Island contestant Sharon Gaffka to emphasize the risks that come with lucrative marketing schemes.

The FCA will also host an “open roundtable discussion” with influencer agents and the Influencer Marketing Trade Body in the coming months.

Related: Celebs who got burned endorsing crypto and those that got away with it

Across the channel, France is edging closer to banning French social media influencers from promoting cryptocurrencies and NFTs from unlicensed firms after the National Assembly’s economic committee voted in favor of an amendment proposal on March 23.

If passed, the new law would add crypto assets to a list of prohibited products, such as gambling and pharmaceuticals, that cannot be promoted by influencers.

Those found to violate the incoming law may also be subject to two years’ imprisonment with a fine of 30,000 Euros ($32,300).

Reality TV star Kim Kardashian, boxing legend Floyd Mayweather and internet celebrity Jake Paul are some of the most notable figures to have found themselves embroiled in allegedly promoting crypto investment schemes.

Magazine: Crypto Twitter Hall of Flame: Lark Davis on fighting social media storms, and why he’s an ETH bull: Hall of Flame

FCA’s incoming chair calls for further crypto regulation

The new chair of the UK’s FCA makes condemnatory comments about cryptocurrencies ahead of his tenure in 2023.

The United Kingdom’s Financial Conduct Authority’s (FCA) recently appointed chair has presented an unfriendly attitude toward cryptocurrencies in a cross-party Treasury select committee meeting.

Ashley Alder, who will assume control of the FCA in February, told Treasury members on Dec. 14 that cryptocurrency-related businesses were “deliberately evasive” and suggested the sector facilitated money laundering.

According to a report from Financial Times, the current chief executive of Hong Kong’s Securities & Futures Commission highlighted his belief that the cryptocurrency ecosystem creates risk that requires further regulation from government:

“Our experience to date of [crypto] platforms, whether FTX or others, is that they are deliberately evasive, they are a method by which money laundering happens in size.”

Alder also added that the cryptocurrency sector bundles “a whole set of activities which are normally segregated’ which leads to ‘massively untoward risk.”

The incoming FCA chair’s comments are seemingly at odds with the regulatory body’s efforts to provide a fostering environment for the cryptocurrency industry in the United Kingdom.

The institution told Cointelegraph earlier this year that’s oversight was largely limited to registering locally-based cryptocurrency exchanges for Anti-Money Laundering (AML) purposes. There are 41 exchanges currently listed on the FCA’s registered crypto asset roster.

The U.K. Treasury is now looking to formulate new regulatory rules for the cryptocurrency industry, which could include limits on the amount that foreign companies cansell into the country. This has largely been driven by the collapse of FTX in November.

The FCA is also set to be tasked with monitoring operations and advertising of cryptocurrency businesses as part of the proposed regulatory changes.

Crypto.com secures UK registration for ‘cryptoasset activities’

As defined by the FCA, “cryptoasset activity” includes anything that involves exchanging one crypto for another or exchanging crypto for fiat and vice versa.

Digital asset exchange Crypto.com has just been given the green-light for “certain cryptoasset activities” in the United Kingdom, after receiving registration confirmation from the Financial Conduct Authority (FCA) on Tuesday. 

According to an Aug. 16 entry in the FCA’s Financial Services Register, ‘FORIS DAX UK LIMITED’ has been registered to conduct “certain cryptoasset activities”, whilst also obtaining Money Laundering Regulation Status.

FORIS DAX UK LIMITED is listed as the registered UK trading name for Crypto.com.

Details on the registration are scarce at the time of writing and Crypto.com and the FCA are yet to comment on it, however, the FCA website suggests that businesses carrying on crypto asset activity in the UK must register to be compliant with money laundering, terrorist financing and transfer of funds regulations.

As defined by the FCA, crypto asset activity includes exchanging crypto assets for money or money for crypto assets, or automating a machine to do so, and exchanging crypto assets for crypto assets.

On the other hand, the FCA has also compiled a list of 248 UK businesses that appear to be carrying on crypto asset activity that is not registered with the FCA for anti-money laundering purposes.

Existing businesses in the UK were required to be registered with the FCA by 9 January 2021 in order to continue carrying on their business, with businesses that have applied but are still having their applications processed being granted temporary registration.

The FCA has enforcement powers allowing it to investigate and impose financial penalties on companies that are not in compliance.

Crypto.com, a Singapore-based cryptocurrency exchange that operates globally with over 50 million users, has been pursuing regulatory milestones at breakneck speed as of late.

The registration in the UK follows preregistration filings for crypto trading platforms seeking regulatory approval in Canada on Monday and approval as a Virtual Asset Service Provider in the Cayman islands on August 11.

On August 8 the exchange also obtained Virtual Asset Service Provider and Electronic Financial Transaction Act registration in South Korea following the acquisition of payment service provider ‘PnLink Co., Ltd.’, and virtual asset service provider ‘OK-BIT Co., Ltd.’.

With these and other additional regulatory milestones, Crypto.com appears to be pushing to be regarded as a secure and trustworthy exchange within the digital asset market, and its CEO Kris Marszalek has been outspoken regarding their progress.


Crypto.com secures UK registration for ‘cryptoasset activities’

As defined by the FCA, “cryptoasset activity” includes anything that involves exchanging one crypto for another or exchanging crypto for fiat and vice versa.

Digital asset exchange Crypto.com has just been given the green-light for “certain cryptoasset activities” in the United Kingdom, after receiving registration confirmation from the Financial Conduct Authority (FCA) on Tuesday. 

According to a Tuesday entry in the FCA’s Financial Services Register, FORIS DAX UK LIMITED has been registered to conduct “certain cryptoasset activities,” while also obtaining money laundering regulation status.

FORIS DAX UK LIMITED is listed as the registered U.K. trading name for Crypto.com.

Details on the registration are scarce at the time of writing, and Crypto.com and the FCA have yet to comment on it. However, the FCA website suggests that businesses carrying on crypto asset activity in the UK must register to be compliant with money laundering, terrorist financing and transfer of funds regulations.

As defined by the FCA, crypto asset activity includes exchanging crypto assets for money or money for crypto assets, or automating a machine to do so, and exchanging crypto assets for crypto assets.

On the other hand, the FCA has also compiled a list of 248 U.K. businesses that appear to be carrying on crypto asset activity that is not registered with the FCA for Anti-Money Laundering purposes.

Existing businesses in the U.K. were required to be registered with the FCA by January 9, 2021, in order to continue carrying on their business, with businesses that have applied but are still having their applications processed being granted temporary registration.

The FCA has enforcement powers allowing it to investigate and impose financial penalties on companies that are not in compliance.

Crypto.com, a Singapore-based cryptocurrency exchange that operates globally with over 50 million users, has been pursuing regulatory milestones at breakneck speed as of late.

The registration in the UK.. follows preregistration filings for crypto trading platforms seeking regulatory approval in Canada on Monday and approval as a virtual asset service provider in the Cayman Islands on Aug. 11.

On Aug. 8, the exchange also obtained virtual asset service provider and Electronic Financial Transaction Act registration in South Korea following the acquisition of payment service provider PnLink Co., Ltd. and virtual asset service provider OK-BIT Co., Ltd.

With these and other additional regulatory milestones, Crypto.com appears to be pushing to be regarded as a secure and trustworthy exchange within the digital asset market, and its CEO Kris Marszalek has been outspoken regarding their progress.


Hong Kong securities regulator CEO to lead UK financial watchdog

Ashley Alder said the FCA would help “chart the U.K.’s post-Brexit future as a global financial centre, which continues to support innovation and competition.”

Ashley Alder, the CEO of Hong Kong’s Securities and Futures Commission, will become the next chair of the United Kingdom’s Financial Conduct Authority.

In a Friday announcement, the U.K. Treasury said it had appointed Alder to chair the country’s financial watchdog starting in January 2023. He will succeed interim FCA chair Richard Lloyd, who took office following Charles Randell’s departure in May.

Alder has led the Hong Kong securities regulator since 2011 and also chaired the International Organization of Securities Commissions, or IOSCO. In a March report from the IOSCO, Adler said decentralized finance was “a novel and fast-growing area of financial services” but posed potential risks as the industry grew.

In his acceptance to chair the FCA, Alder said the financial watchdog would help “chart the U.K.’s post-Brexit future as a global financial centre which continues to support innovation and competition through its own world-leading regulatory standards.” The U.K. regulator monitors roughly 51,000 financial services firms and financial markets across the country.

Related: Ideas vs. practice: How are regulators working together on crypto?

Alder’s appointment came amid the FCA announcing the hiring of 500 additional staff members in 2022 as part of a three-year strategy, which includes “proactively [shaping] the digitalization of financial services through developing our regulatory approaches to digital markets.” Matthew Long of the National Crime Agency will become director of the FCA’s payments and digital assets unit starting in October.

The U.K. government experienced mass resignations in the last seven days amid reports Prime Minister Boris Johnson promoted former deputy chief whip Chris Pincher to a senior position while knowing about allegations of groping. Johnson resigned on Thursday following notices of departure from more than 50 members of parliament including Chancellor of the Exchequer for the United Kingdom Rishi Sunak and Economic Secretary to the Treasury John Glen.

Nadhim Zahaw has taken over for Sunak as chancellor of the Exchequer, while Reuters reported on Friday that MP Richard Fuller had been appointed the next U.K. economic secretary.