Crypto: FCA cannot ignore ‘harms that exist’ in market as new rules come into force
The Financial Conduct Authority’s (FCA) crypto lead Matthew Long said regulators could not ignore “the harms that exist” in the market as new rules come into force.
Speaking at London FinTech Week, Long said regulators around the world needed to be vigilant of the risks that the crypto sector poses to consumers.
He said “opportunities can only be utilised if the correct conditions are laid but we cannot dismiss the harms which exist in this market. They do not discriminate based upon the jurisdiction.”
Regulators around the world have been clamping down on the crypto sector after a series of high-profile implosions, culminating in the spectacular collapse of FTX last year.
Last month the umbrella group of regulators, IOSCO, set out a benchmark for crypto regulation.
In the UK, the FCA is bringing in tough new rules on crypto marketing in order to bring about greater consumer protections.
The protections include a cooling-off period when making trades for the first time and a ban on ‘refer a friend’ bonuses.
Long said the rules give people “the time and the right risk warnings to make an informed choice ahead of purchasing crypto.”
Promotions which are not made in-line with the legislation will be a criminal offence, punishable by up to two years in prison.
Many crypto firms have faced issues securing certification in the UK. Long highlighted that since 2020 only 14 per cent of firms who applied for anti-money laundering and counter-terrorist financing registration – the most basic form of certification – had been successful.
Despite this, data from the FCA shows that estimated crypto ownership has more than doubled from 2021 to 2022, with 10 per cent of 2,000 people surveyed saying they own crypto.
As Long noted, there was a time when “every tube station or social media site had an advert promoting cryptoassets.”
Long said he would not relent on imposing a high standard on crypto firms. “I will be unwavering in that firms must operate to a high standard,” he said. “Cryptoasset markets are no exception.”