UK Regulator FCA Has Issued Over 1K Warnings to Crypto Firms Since October

As a seasoned analyst with extensive experience in the financial sector and a keen interest in the dynamic world of cryptocurrencies, I find the recent actions of the U.K.’s Financial Conduct Authority (FCA) both impressive and necessary. The FCA’s aggressive stance against unregistered crypto firms flouting the rules is commendable, especially considering the potential risks associated with this relatively new and unregulated market.

Since the implementation of financial promotion regulations for cryptocurrency businesses in October 2020, the U.K.’s Financial Conduct Authority has issued more than 1,000 warnings, as reported by Lucy Castledine, the regulator’s director of consumer investments, to CoinDesk.

To communicate with clients in the U.K., crypto companies must first register with the relevant regulatory body.

In a recent interview, Castledine emphasized that our actions will not only focus on legal firms but also on those acting illegally. To date, we have issued over 1,000 warnings towards unregistered crypto companies that are deceptively marketing themselves within the U.K. market.

As an analyst, I’ve taken action by issuing alerts against questionable firms, which has already led to the removal of 48 apps from U.K. app stores. Moving forward, we will collaborate with third parties such as social media companies to eliminate illegal websites and ensure they are properly taken down when necessary.

On Wednesday, the FCA published guidance for registered firms noting both good and poor practice.

To ensure compliance with the regulations, businesses must make a genuine effort to determine if a potential client falls under the categories of restricted, high-net worth, or certified sophisticated investors, prior to sharing any financial promotion materials.

According to the report, many companies allowed their customers to classify themselves accurately on their own. However, there were instances where companies were leading consumers in this process by instructing them about what information to provide next. The Financial Conduct Authority (FCA) pointed this out.