UK FCA Increases Regulation of Cryptocurrencies
The UK’s Financial Conduct Authority (FCA) has recently intensified its oversight of cryptocurrencies, issuing over 1,000 notices to unregistered cryptocurrency firms operating in the UK following the implementation of new financial promotion regulations. These rules mandate that cryptocurrency exchanges must obtain an FCA license to operate in the UK and cater to its residents.
Crackdown on Unregistered Cryptocurrency Companies
Lucy Castledine, the FCA’s director of consumer investment, highlighted the agency’s proactive stance in an interview. The FCA is targeting companies that offer services without proper registration, resulting in significant penalties. Castledine mentioned that 48 apps were removed from the UK app store as a consequence of these actions. In addition, the FCA is collaborating with social media platforms to ensure the removal of any content promoting illicit activities in the cryptocurrency market.
Enforcement of Promotional Guidelines
Recent announcements from the FCA underline the necessity for compliance with promotional regulations. Companies are required to accurately categorize consumers as restricted, high net worth, or certified sophisticated investors before disseminating financial promotion materials. While many companies adhere to these guidelines by allowing consumers to self-identify, others intentionally mislead them on how to proceed.
Risks of Non-Compliance and Fines
Emphasizing the repercussions of failing to meet regulatory requirements, the FCA fined Coin Library, a cryptocurrency exchange branch based in the UK, $4.5 million. The penalty was imposed for breaching agreements made under a consent order related to user registration procedures. CB Payments Ltd. (CBPL), associated with US-based company Coinbase, has committed to not accepting consumers labeled as “high risk” by the FCA. This case underscores the FCA’s commitment to enforcing regulatory standards to safeguard consumers and the market.
Also read: UK Law Commission Proposes Cryptocurrency as Personal Property
