Home Governments & Regulations

UK Regulations Intensify as FCA Investigations Increase

A recent report from UK publication Financial Times has disclosed sensitive information from the Financial Conduct Authority (FCA) and its activities regarding cryptocurrency, obtained via David Haffron.

Haffron is a partner at law firm Pinsent Masons, who revealed that there has been a 74% increase in investigations (by number of businesses) compared to the previous year: 87 in 2019, compared to 50 in 2018.

The FCA declined a request for comment from the Financial Times, nor has it released any statements on the news since it was broken.

“[this] reflects the FCA’s increasingly hands-on and no-nonsense approach to enforcing the law in the cryptocurrency market… For cryptocurrency businesses acting lawfully these statistics will be encouraging — they want bad actors pushed out.”

David Heffron (Partner at Pinsent Masons), who ‘gleaned’ the data from the FCA

Mirroring the USA and its Securities and Exchange Commission (SEC), the UK FCA has been the target of a lot of criticism regarding the actions it has taken on cryptocurrencies – and the attitudes it has broadcast.

British exchange ‘CoinShares’ recently issued a public statement denouncing a proposed FCA ban on the sale of derivatives and exchange traded notes (ETNs) that had been made back in July, for example.

The company is joined by the World Federation of Exchanges (WFE), which has submitted its own open letter to the United Kingdom.

“The WFE recognises the volatility identified by the FCA in its consultation report and is supportive of ensuring that proper consumer protection is put in place as a priority for any new and relatively untested product on the market,”

World Federation of Exchanges (WFE)

Not everybody in crypto has been against the FCA recently.

CEO of Ripple Brad Garlinghouse recently praised the UK authority for what he considers a progressive stance on cryptocurrency, in a message which clearly followed an earlier (and more negative) position he had submitted to the SEC.

Garlinghouse, whose organisation has been accused of taking a pro-centralized pro-regulation approaches compared to its decentralized peers, commended the FCA in the midst of its publication: ‘Guidance on Cryptoassets – Feedback and Final Guidance to CP 19/3’ – which had been published in July 2019. 

He particularly highlighted what he called a clear and necessary distinction between different cryptocurrencies.