Wild West: Crypto companies unregulated in the UK

Cryptocurrency cautions come calling with the Financial Conduct Authority (FCA) – the financial watchdog in the United Kingdom – issuing warnings against a massive 111 cryptocurrency companies that still need to register with the authority organisation.

At the beginning of the year, the FCA put regulations in place that all cryptocurrency firms in the country need to comply with Anti-Money Laundering (AML) Counter-Terrorist Financing laws while registering with the FCA. If a firm fails to do so and continues to operate, it’s considered illegal practice.

According to a report by Reuters, Mark Stewart – the head of enforcement at the FCA – commented on the risk of these firms that are operating in the UK without registration. He noted:

“We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firm, consumers. This is a very real risk so we are worried about that.”

The FCA has established a list of the firms that are operating without registration to help protect investors and consumers. If the firm is listed, the FCA warns against engaging with the company, given their lack of abiding by the regulation and the red flags involved with non-compliance.

Crypto boom in the UK

The FCA is concerned that the cryptocurrency’s rise in popularity might see vulnerable enticed to the wrong platform. With more and more citizens investing in cryptocurrency, there has been a remarkable dip in their understanding of the industry – a recipe ripe for risk. Stewart believes that some might be investing in the scene because of the rise in profit opportunity. Pointing towards the risk of volatility, he noted that FOMO might be a driving point:

“The reason many are investing now is because they have a fear of missing out on what might be a boom. Leaving aside how volatile these instruments actually are, it has tulip mania written all over it.”