The UK’s Financial Conduct Authority (FCA) defended its strict cryptocurrency regulations, emphasizing the need for high standards to protect consumers and ensure market integrity.
After receiving criticism that its regulations are “too tough” and run the risk of inhibiting innovation, the Financial Conduct Authority (FCA) of the United Kingdom defended its approach to regulating the cryptocurrency business.
In a post on the FCA’s website on October 21, Val Smith, the head of payments and digital assets in the authorizations section, emphasized the importance of upholding strict standards. The post aimed to safeguard customers and uphold the integrity of financial markets.
“Relaxing our standards and creating a race to the bottom also won’t ensure people and our markets are protected or even work well.”
Smith predicted in his article that innovations built quickly on “unsafe, unregulated, and untrusted foundations” will most likely fail. Smith rebutted the claims of certain critics who contend that the Financial Conduct Authority’s (FCA) high bar for crypto business registrations could impede the United Kingdom’s efforts to become a global leader in the financial sector.
He stated that the FCA’s strategy is necessary for the long-term development of the industry.In her statement, she emphasized the real-world risks that the Financial Crimes Enforcement Act (FCA) is striving to prevent, such as the financing of terrorist organizations, organized crime, and human trafficking. “Allowing illicit money to flow freely can destroy lives,” she said.
Smith noted that the complexity inherent in the registration process for cryptocurrency companies has been a source of disagreement; nevertheless, he emphasized that no application is denied “out of hand”. Instead, she stated that the Financial Conduct Authority (FCA) examines each company based on a thorough set of criteria, which includes the controls it has in place to prevent financial crime, the surroundings in which it operates, and the clients it intends to serve.
As far as Smith is concerned, this exhaustive screening procedure is essential in order to prevent dishonest individuals from entering the financial system. In spite of this, the local cryptocurrency community has been exercising resistance, describing the regulatory procedure of the agency as a “deterrent” to the business.
A self-regulatory trade association for the cryptocurrency business in the United Kingdom, CryptoUK, announced on September 12 that some of its members had “expressed reluctance” regarding the registration procedure by the Financial Conduct Authority (FCA), describing it as lengthy and complicated.
According to CryptoUK, only four of the 35 crypto business registrations from the previous year have received government recognition.During an interview with Cointelegraph, a spokeswoman for CryptoUK stated that the application is a significant request in terms of resources, people, and funds.
Despite the challenges, Smith asserted that the Financial Conduct Authority (FCA) remains committed to collaborating with prospective cryptocurrency enterprises. The FCA provides pre-application discussions and practical support throughout the registration process in order to assist businesses in attaining the necessary criteria.
In the rapidly developing field of technology, the Financial Conduct Authority (FCA) and the Bank of England (BoE) are continuing to make progress. At the beginning of October, they collaborated to establish a sandbox effort with the purpose of investigating the potential applications of digital ledger technology in the creation, maintenance, and settlement of financial securities.
