The UK’s Financial Conduct Authority (FCA), the agency responsible for overseeing the crypto industry on anti-money laundering and counter-terrorist financing, raised an alarm on Tuesday against 111 unregistered cryptocurrency companies operating in the country.
Addressing the City & Financial’s City Week event, Mark Steward, FCA’s Head of enforcement and market oversight, said: “We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firm, consumers.”
“This is a very real risk so we are worried about that.”
The financial regulator mandated the registration of all crypto companies operating in the United Kingdom. However, the approval process remains very slow, and the watchdog has temporarily allowed the operations of the companies that have already submitted their applications. Only a few firms have gained the status of crypto businesses.
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But, these 111 companies have not even applied for the FCA’s approval, which makes their operations illegal in the country even at this date.
The Number of Crypto Investors in Increasing
Meanwhile, interest in cryptocurrencies among British nationals skyrocketed over the past year. Recently, the FCA revealed that 2.3 million UK adults are now holding crypto assets, which is a significant jump over a year.
However, the concerning thing is awareness about cryptos among these investors has declined.
“The reason many are investing now is because they have a fear of missing out on what might be a boom,” Steward said. “Leaving aside how volatile these instruments actually are, it has tulip mania written all over it.”
The FCA issued multiple warnings against the speculative and risky nature of cryptocurrencies. It even banned the sale of retail cryptocurrency derivatives, citing the lack of knowledge about such sophisticated products among retail investors.