On Sunday, Oct. 8, The Financial Conduct Authority (FCA), the financial markets regulator of the United Kingdom, came into the limelight for adding several crypto exchanges to its warning list citing them as ‘non-authorized.’ An alarming number of 143 crypto firms, among them the well-known ones such as Huobi/HTX and KuCoin, were the latest to be targeted. The regulator’s message to consumers is crystal clear: “You should avoid dealing with this firm.”
Looking into the laws of the U.K., for firms to carry out crypto asset activities, they must either be registered with the FCA or granted a temporary status to operate. If the firms fail to comply with these conditions, the consequences can be as severe as facing criminal charges. This was suggested by Jayson Probin, the crypto financial promotions lead at the FCA. Consequently, ever since 2020, of the 291 applications the FCA received for registration, a mere 38 were approved — translating to a meager 13%.
In the face of the restrictive regulation, even major players have had to adjust their involvement in the U.K. crypto market. In August, the FCA disclosed its list of registered crypto asset providers which encompassed 42 enterprises like Bitstamp, Revolut, and Gemini. PayPal, for instance, paused crypto transactions for U.K. customers until it decodes a way to comply with the FCA requirements. Furthermore, Bybit, the Dubai-based cryptocurrency exchange, had to suspend all its services in the U.K. owing to “regulatory changes.”
While on one hand the FCA’s regulations could be seen as an impediment to business growth, they can also be seen as a necessary step in providing protection and security to consumers in an area famously known for its volatility and potential risks. Market observers thus are on the lookout for how these strict regulations could potentially shape the future of the burgeoning crypto industry.
Source: Cointelegraph
