The chief of the Financial Conduct Authority (FCA) had some harsh words for the crypto business in a speech in London yesterday.
During a speech in London yesterday, Nikil Rathi, CEO of the Financial Conduct Authority (FCA), reaffirmed the regulator’s hard stance on cryptocurrencies.
“As you will all know, we have warned repeatedly investors in [crypto] products must be ready to lose all their money,” he remarked yesterday at the Mansion House in London.
He went on to say that the FCA has “often been criticized for acting slowly or with too much aversion,” but that this is changing and the FCA is now applying a much stricter approach “in dealing with serious misconduct.”
Rathi’s remarks follow a series of FCA crypto-related crackdowns that began in January of this year.
The FCA produced a list of five problems that customers should keep in mind when dealing with cryptocurrency to begin off 2021.
Consumer protection, price volatility, product complexity, charges and fees, and misleading marketing material were the top five concerns.
“Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money,”
according to the FCA at the time.
The FCA began putting regulatory pressure on crypto asset businesses two months later.
The regulator announced in March that crypto businesses would now be forced to submit annual financial crime reports, which is a standard obligation in the banking industry but a contentious topic in the crypto space.
The FCA focused its attention on Binance this summer, one of the most well-known and widely utilized cryptocurrency exchanges.
Binance Markets Limited (BML), a Binance subsidiary that was acquired to own and run a bespoke crypto exchange for UK users, received a consumer warning from the FCA in June.
The prohibition was based on the firm’s approach (or lack thereof) to relevant anti-money laundering requirements, according to the regulator. According to a spokeswoman for the FCA, “putting two and two together, we obviously have issues with standards in that area.”
After BML apparently declined to offer basic facts about its business, the FCA doubled down on its Binance stance last month, alleging the crypto exchange is “not capable” of being regulated.
“The FCA considers that the firm’s responses have been incomplete and have included direct refusals to provide information. These include failures to provide details about how the business and Group are organized,” according to the FCA in a supervisory notice.
Binance has also failed to respond to Decrypt’s persistent demands for information regarding the company’s and group’s operations.