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FCA is investigating 50 crypto firms

FCA is investigating 50 crypto firms

The Financial Conduct Authority opened over 300 cases related to crypto firms in a six-month period last year and has 50 live investigations, including criminal probes, into companies in the sector.

The FCA, in common with regulators around the world, is being forced to take on an explosion of scams and unauthorised companies in the newly-mainstream crypto world.

The watchdog's ScamSmart website received 4300 reports of potential crypto scams in the six months to September 2021. The second most common category of scam reported was pension transfers, with 1600 reports.

The FCA still has limited oversight of crypto firms, restricted to closing unsupervised companies based in the UK and ensuring compliance with AML rules.

In total, the FCA received 16,400 enquiries about possible scams, up nearly a third on the same period the previous year. The regulator also stopped a quarter of applications from firms wanting to join the consumer investment market, up from one in five in the last financial year.

Sarah Pritchard, executive director, markets, FCA, says: "Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be.

"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."

Comments: (4)

A Finextra member
A Finextra member 03 March, 2022, 17:46Be the first to give this comment the thumbs up 0 likes

Crypto is heavily used for financial and other crime, and is horrible for the environment.  Why are we not making it illegal as China did?

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 04 March, 2022, 16:05Be the first to give this comment the thumbs up 0 likes

Didn't China do that so it could promote its own CBDC and therefore control money fully?

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 March, 2022, 11:59Be the first to give this comment the thumbs up 0 likes

Bitcoin is the most profitable asset class in history. But that shouldn't stop people who didn't profit from it and don't want others to either from calling for its ban. 

A Finextra member
A Finextra member 05 March, 2022, 21:30Be the first to give this comment the thumbs up 0 likes

China would have numerous reasons - including that money it doesn't see could be used against the dictatorship.  The whole point is to do things that are either criminal or anti government.  A person invests in it through an 'exchange'.  Looses everything when the exchange folds.  Or never really gets anything in the first place.  Drug dealers and arms dealers love it,.  Ransomware thieves love it, though perhaps a bit less now.  There is no need for it - there are plenty of legit ways to invest and to move money.  Oh forgot, it's great for tax evasion.  One way or another, it's all about crime.  Plus its horrible for the environment.