The FCA Is Scrutinizing 50 Unlicensed Crypto Companies
Following an escalation in the number of scams reported, the Financial Conduct Authority (FCA) in the United Kingdom announced Thursday that it is taking strong measures to combat widespread financial frauds in the consumer investing sector. Investors and scam victims alike are being urged, by the Financial Conduct Authority (FCA), to be InvestSmart and ScamSmart.
The Watchdog Strikes Back
The Financial Conduct Authority (FCA) announced Thursday that it has initiated more than 300 probes against unregistered crypto companies in the previous six months, “many of which may be scams.” The country’s financial watchdog is conducting an additional 50 investigations into legally operating crypto firms. These investigations include criminal probes.
FCA reports that from April to September of 2021, British citizens voiced 16,400 scams involving cryptocurrencies to the agency. According to the regulatory authority, “more assertive supervision and enforcement action” will be used, as would “being tougher with firms who want to operate” in the United Kingdom, among other things.
The watchdog launched consultations in January for “high-risk investments, including crypto assets,” the watchdog launched consultations in January. On March 23, the group will be taking comments and suggestions.
Consumers can look into FCA’s ScamSmart website if they think about investing. In addition to the Warning List, the site includes an online tool that lets consumers learn more about the dangers connected with a particular investment and see a list of companies that the FCA is aware are operating without its permission. In October 2021, an educational program for first-time investors had been introduced by FCA.
The Financial Conduct Authority has turned down more than a quarter of financial institutions’ requests to join in the consumer investment sector.
The risk of harm is addressed at the authorization stage, preventing firms from accessing the regulatory perimeter that does not meet the FCA’s minimal criteria. As a result, it prevents problems that may necessitate supervision or enforcement in the future.
More aggressive oversight and enforcement actions are being used by the FCA and tighter treatment of companies that wish to operate in the United States.
“Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be,” FCA Executive Director of Markets Sarah Pritchard noted.
“Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed. Find out how to avoid scams on the ScamSmart website and get tips on investing safely on the InvestSmart website.”
UK Regulator Crackdown on Misleading Ads
Across the United Kingdom, other regulatory bodies have taken action against crypto firms, often associating the space with illicit transactions and other illegal activities. Just recently, the Advertising Standards Authority (ASA), the UK’s top watchdog for public advertising in the United Kingdom, prohibited the Floki Inu meme token from use. Following the success of Shiba Inu and Doge investors, Floki Inu reportedly launched a campaign in the second half of 2021 to promote FOMO and Floki purchases.
Regulating cryptocurrency is simple to understand. If governments enforce specific standards, they can assist create a more secure environment for those working in the crypto industry.
