Governments from all parts of the world are keenly looking at the impact of cryptocurrencies on their economies and potential of the technology.
Over the last three months, calls to regulate the industry have gotten massive support from not only the governments but also independent bodies that monitor the financial industry.The UK Financial Conduct Authority is one of the most recent organizations to launch investigations on this industry. As stated in an article posted on CCN, the firm is investigating the operations of 24 cryptocurrency businesses operating in the country. It is important to note that FCA is the official United Kingdom financial regulator and markets watchdog.
While responding to a query made by an unnamed person who is interested in the crypto industry, FCA confirmed to have received reports from seven whistle blowers about the operations of some of the cryptocurrency businesses that it is investigating.
The said businesses are not authorized by the government to facilitate cryptocurrency transactions and trading. One of the main objectives of this investigation is to ascertain that the listed businesses are engaged in business deals with the proper accreditation documents and authorization from the government.
Can FCA Successfully Regulate the 24 Businesses?
Yes, FCA has all the resources it requires to carry out an extensive investigation that will not only uncover the dealings of the businesses but also their clients and partners. If found guilty, the agency will definitely file a legal suit against them in court. Evidence to proof that the businesses have been engaged in regulated financial trading without the consent of the government will come in handy during the hearing of the case.
According to John Griffith-Jones, the Chairman of FCA, unregulated cryptocurrency businesses such as trading platform have the potential to cause great harm to the economy as well as expose clients to numerous risks that could plunge them into financial turmoil. At the moment, the agency may decide to sensitive the public about the firms’ activities by posting articles on their website. Alternatively, they could decide to take a civil action such as halting the business operations and freezing all their assets thereby making it impossible for them to operate in the country. The companies could also face criminal charges in court.
In the past FCA, has clearly stated that cryptocurrencies have gained massive interest not only in UK but also across the globe.
The firm confirmed the need to regulate the market in its recent business plan as some of the models used by the cryptocurrency companies’ fall under its scope and mandate. The firm was also acknowledged the fact it does not have the mandate to control cryptocurrency trading fully yet since the required policies are yet to be enacted by the government.
Last month, the agency released a press statement that stated all businesses that are in one way or another involved in digital currencies to make sure that they meet all the authorization requirements before starting to offer their services. The press statement also stated that failing to comply with the requirements is a criminal offense even though not all digital assets are under its regulatory sphere.