Financial Conduct Authority Places 50 Crypto Firms Under Investigation


The recurring rate of scams and fraud has led to the scrutiny of many crypto firms by the Financial Conduct Authority (FCA), the United Kingdom’s market regulator. The regulator stated on Thursday that up to 50 crypto firms suspected to be operating without authorization or harboring scammers are currently under its radar and are undergoing investigation.

The FCA in time past has constantly received reports from crypto users of the level of theft they experience in the digital space. Customers are sometimes made to trade and invest on pseudo crypto sites unknown to them, or they are not properly equipped with information regarding the level of risks and uncertainties involved in trading crypto assets.

These scam activities are mostly accomplished by stealing the identity of the customer and sometimes cloning details of their crypto wallets to make illegal purchases. And the degree to which this happens has become a global concern, hence, prompting the FCA to take action in order to protect consumers.

To mitigate the risks to consumers, crypto firms, and other high-risk ventures had to be regulated and certified. Therefore, the FCA declared the 31st of March as the expiration date for the application and processing of license for anti-money laundering (AML) schemes for crypto-inclined businesses. 

As the deadline draws nearer, the number of crypto firms coming forward for the regulation and certification has only been in trickles leaving the larger percentage in the full illegal operation standing. This perceived non-compliance has set in full gear individual interrogation which has so far fetched the 50 firms currently under investigation.  

The finance watchdog has warned customers, individuals, and organizations alike, to be on the lookout for certain features before engaging in any transaction with such high-risk firms. Confirmation of the enlistment of such names on the Finance Conduct Authority website is one of the regulation tactics.

FCA’s Broad Skepticism

Last month, FCA had expressed its skepticism about Paysafe’s deal with Binance on the premise that the exchange company had no license authorizing it to operate in the UK at this time. Records also showed that Binance had no pending application with the FCA.

When approached for an explanation, Binance had no response to exonerate itself. The Financial Conduct Authority is still probing Binance and many other firms on their non-compliance to local regulations and these companies might have to stop their operation in the UK until a license is issued to them.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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