The FCA Moves To With Speed To Enforce Compliance In UK Crypto Economy

Compliance is becoming critical in the future of the Crypto economy. Government agencies have become keener to gain control of Digital Assets Markets through regulations. This revamped effort is being witnessed globally with countries such as the USA, Japan, and UK going the extra mile to be vigilant in monitoring Crypto platforms.

In the United Kingdom, for instance, the Financial Conduct Authority (FCA), is tightening the knot on errant Crypto platforms. Although this may create ripples in the market in the short run, long term benefits can hardly be overemphasized as the market becomes sanitized in the process.

Consequently, Crypto investors are cushioned from being swindled and this serves as an incentive for prospective investors to put their money in Digital Assets.

Ramping Up Scrutiny

According to the Financial Times (FT), the UK Financial Conduct Authority (FCA) is tough on companies operating in the Crypto space.

This is because, in 2019, the agency is examining 87 cases of Digital Asset-related filings which is a record growth compared to 23 cases in 2018.

In all these cases, the FCA is moving with speed to respond to grievances by investors against Crypto platforms such as exchanges, custodial platforms, Crypto-venture firms, Blockchain projects with ICOs, etc.

Taming Run-Away Scams

The advent of the 87 cases is characterized by a total loss of £27 million b UK based investors after falling prey to calculated schemes by Cryptocurrency scammers who are seemingly getting smarter by the hour.

Since Cryptocurrency transactions take place in decentralized environments in Blockchain ecosystems, features such as Cryptography conceal the identity of users which can be exploited by malicious actors. Further, wallets are tagged by public keys which hardly lead to perpetrators especially in cases where KYC standards are not in force.

Nevertheless, compliant platforms have KYC measures in place that make it easier for FCA and other security agencies to establish Crypto trails and track down bad actors.

taming crime

Enforcing Compliance Has A Positive Net Effect On Digital Assets Market

A belief is shared by Crypto experts that a tough approach such as the FCA scrutiny has a positive net effect on the growth of the industry. One such proponent, a partner Pinsent Masons Advocates, David Heffron, is confident that compliant actors want the non-complaint to be “pushed out”.

Hence, confidence in the market will spur market activity that could avert short term bear runs due to fraud-related shocks like ICO scams.

The FCA goes further by advising investors to be vigilant by avoiding get-rich-quick schemes that capitalize on rallies like the BTC/USD 100% surge in 2019 to net their prey. In this regard, celebrity endorsements, unrealistic promises, and vague whitepapers should serve as red flags.