UK financial watchdog urges political support for crypto bans

UK’s Financial Conduct Authority Urges Political Support for Crypto Bans

Financial Conduct Authority, Britain’s financial regulatory body, has called on lawmakers to support its cryptocurrency bans.

In a report by Reuters on Tuesday, the FCA is currently asking lawmakers in the United Kingdom to show their support for its unpopular decision not to issue licences to numerous cryptocurrency exchanges.

This latest development comes barely a week after the popular cryptocurrency exchange FTX collapsed, with billions of user funds trapped on the platform. 

While commenting on this latest development, the FCA’s Chief Executive, Nikhil Rathi, said the regulatory agency has come under pressure as 85% of licence applications from crypto trading firms have either been rejected or withdrawn

The FCA had banned some crypto exchanges from operating in the UK as they don’t have FCA approval for their anti-money laundering controls.

However, the UK wants to become a globally competitive financial center, and cryptocurrencies are now a crucial part of the global financial ecosystem. Hence, the FCA is under pressure to keep its doors open to more crypto exchanges. Rathi told lawmakers that;

“We have taken quite a bit of heat from people saying we are allowing this innovative activity to move to other jurisdictions, and that other jurisdictions are stealing a march. That means sometimes turning down some of the largest players in the global market.”

FCA’s Chief Executive, Nikhil Rathi,
FCA Crypto Regulation UK

Rathi said he stands by his decision to ban such platforms despite the pressure. He said; 

“That does require, I think, to have parliamentary support and political support when we take some of those robust decisions.”

FCA’s Chief Executive, Nikhil Rathi,

Rathi lamented that there are no consumer protections for crypto investments at the moment, and the FCA doesn’t have information on how much money UK consumers have put into crypto exchanges operated outside the country. He added that;

“If they want to, they can go all around the world and deposit money by credit card that we don’t track, and we have no means of tracking it.”

FCA’s Chief Executive, Nikhil Rathi,

 Although cryptocurrencies are unregulated in the UK at the moment, the parliament has approved a new financial services and markets bill, which is expected to bring the marketing of crypto assets under the regulatory net. The bill is set to give the FCA powers to protect consumers.

FTX’s collapse has spurred regulatory conversations in the UK and other parts of the world. 

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