UK Regulatory Body Conducting 50 Crypto-Related Investigations, Up 100% Since May

Following the yearlong collapse in cryptoasset prices, the UK’s Financial Conduct Authority (FCA) is now conducting twice as many crypto-related investigations than it was in May of this year, according to reporting done by the UK Telegraph paper. 

The FCA are investigating 50  firms which it believes are operating illegally in a financial services  capacity without the organization’s permission, up from 24 earlier in  the year. Seven so-called whistleblowing reports have been filed to the  FCA by employees of crypto-businesses this year. According to a source speaking to  the Telegraph, this is perhaps due to an uptick in complaints of fraud  from disgruntled investors. 

Regulatory Clarity Still Lacking

CryptoGlobe reported  in October that the FCA had been preparing to refine their position on  regulation of cryptoasset exchanges, in a preparation to possibly expand  regulatory oversight beyond exchanges only dealing with cryptoasset  derivative products, such as securities and futures. A “Taskforce” had by mid-October been formed by the FCA to tackle these questions. It has since then published a report on the subject of cryptoassets and the UK government’s regulatory remit. 

The report however, seems only to  be preliminary. It concluded that the considerations should be extended  into 2019, to decide “whether the regulatory perimeter requires  extension in relation to cryptoassets that have comparable features to  specified investments but that fall outside the perimeter,” e.g.  non-derivative products. There is, therefore, no  definitive indication that the uptick in investigations is due to  any change in policy. 

At this juncture, the UK government does not have a  general regulatory framework for dealing with cryptoasset exchanges and  tokens, but will “issue a consultation in early 2019” in order to  develop one. For now, they will simply  continue to warn investors of the risks, and “monitor [crypto’s]  potential implications for financial stability.”