Ashley Alder, the newly appointed chair of the Financial Conduct Authority (FCA) of the UK, made an unfavorable remark about cryptocurrencies and the businesses that deal with them.
Cryptos as a platform for money laundering
During a meeting of the Treasury Select Committee, Alder, who will assume the new head of the FCA in February, told the committee that cryptocurrencies are often used for money laundering.
“They [crypto firms] are a method by which money laundering happens at size.”Ashley Alder, future chair of the Financial Conduct Authority (FCA)
He added that the businesses that deal in them, like FTX, are “deliberately evasive.”
Alder will be starting work as the new chief executive officer of the UK Financial Services Authority on February 20. He currently heads the Securities and Futures Commission of Hong Kong.
According to the FCA website, he will work alongside its CEO, Nikhil Rathi, ensuring that the organization’s strategy is clearly communicated and understood. He will also have the opportunity to challenge Rathi.
FTX collapse increased crypto scrutiny
Following the collapse of FTX, one of the biggest crypto exchanges at one point, the industry has been under increasing scrutiny. Some major platforms investigated include Binance, the world’s biggest exchange with more than $7 billion in volume. It is being investigated for money laundering violations.
To ensure that the crypto industry operates in the country and follows its anti-money laundering rules, the Financial Conduct Authority (FCA) registers companies. The regulator hopes to get more authority over the industry once the Financial Services Bill passes. However, it warns investors about the risks associated with investing in cryptocurrencies.
The FCA currently requires all firms operating in the crypto industry to have proper systems and controls in place to prevent financial crime. The agency also noted, through its spokesperson, that it has seen several red flags regarding registering certain crypto asset businesses. These businesses have been asked to provide the necessary information to the agency so that it can identify and prevent money laundering and terrorist financing.
Some companies already registered
The spokespersons also noted that it has been working with crypto firms to help understand the agency’s expectations. It will continue to register them if they can meet the necessary standards. So far, over 40 firms have already been registered with the agency.
On May 2021, Hong Kong implemented strict regulations that prevented crypto firms from serving retail clients.
During a panel discussion about the issue of money laundering and terrorism financing in the crypto industry, Alder noted that how these firms bundle their activities can lead to massive risk.