UK Watchdog Opens Probes into 24 Crypto Firms

The FCA is also investigating seven whistleblower reports

by Deyana Laguna
28 May • 2 min
In Regulation

The UK Financial Conduct Authority (FCA) has opened 24 investigations into cryptocurrency businesses, local media outlet CityWire reported on Friday.

Responding to a Freedom of Information request, the FCA said the companies are being investigated to determine whether they might be carrying on regulated activities that require FCA authorization.

If we conclude that they are, then we may investigate and take action, identifying and determining the most serious matters which pose the greatest risk to consumers, the City watchdog stated.

 

The FCA could issue an alert about questionable entities, go to court to freeze a companys assets and business activities, or criminally prosecute those who may have violated the law. The regulator noted, however, that not all crypto assets are under its jurisdiction.

The FCA also revealed that seven industry-related whistleblower reports have been filed since the start of the year. The outcomes of those reports, as well as the names of the investigated companies, have not yet been shared with the public.

The UK is expected to reveal cryptocurrency regulations later this year. In March, the FCA announced that it will be collaborating with the UK Treasury Committee and the Bank of England in drafting a discussion paper on various aspects, risks, and opportunities presented by cryptocurrencies.

Meanwhile, CryptoUK, a self-regulatory trade body for the British cryptocurrency industry, has recently called on a group of influential Members of Parliament (MPs) to support proposed rules governing the trading of virtual currencies.


Global Authorities Step Up Scrutiny


The FCAs investigations join regulatory steps currently underway in other major jurisdictions regarding crypto business compliance.

Last Monday, regulators in the US and Canada launched an international crackdown on some potentially fraudulent cryptocurrency investment schemes. The so-called Operation Cryptosweep has so far resulted in nearly 70 inquiries and investigations, as well as 35 pending or completed enforcement actions related to Initial Coin Offerings (ICOs), cryptocurrency investment products and the entities behind them.

Just a few days later, the US Department of Justice (DoJ) reportedly launched a criminal probe into a suspected cryptocurrency price manipulation. DoJ is working with the Commodity Futures Trading Commission (CFTC) to investigate whether traders are using illegal practices to influence the prices of Bitcoin (BTC), Ethereum (ETH) and other digital currencies.

Across the globe, the Monetary Authority of Singapore (MAS) on Thursday warned eight cryptocurrency exchanges about their obligation to have prior registration when offering virtual currencies that are securities. The regulator also ordered one ICO issuer to stop offering tokens to Singapore-based investors because of a lack of securities registration.