Despite the growing interest in cryptocurrency, not all ventures should be trusted by default. In the United Kingdom, an active investigation into two dozen cryptocurrency firms has been launched by the Financial Conduct Authority. Although this doesn’t mean any of these firms have done something illegal, it will be interesting to see what the investigation turns up.
The FCA is on the prowl
The cryptocurrency industry is undergoing some big changes. For their part, the UK’s Financial Conduct Authority is looking for ways to crack down on illicit activity in the cryptocurrency industry. Cracking down on companies running illegitimate businesses is of the utmost importance.
At present, the FCA is launching no less than two dozen investigations involving cryptocurrency firms. Additionally, seven whistle-blower reports were investigated in 2018. All of those reports pertain to Bitcoin and other cryptocurrencies, although the exact nature of the investigations is rather unclear at this time.
Of the firms under active investigation, all of them seem to be offering some form of unauthorized product or service. The FCA’s main objective is to determine whether or not those companies are conducting regulated activities which may require proper authorization now or in the future. Assuming those companies need to obtain authorization, it seems appropriate to assume their current activities will need to be suspended.
It is evident these investigations will bring some negative attention to cryptocurrency as well. While these ventures are designed to make this industry more legitimate, there still needs to be active regulation in this industry. To that end, FCA Chairman John Griffith-Jones warned that a lack of cryptocurrency regulation could potentially pose a problem in the near future.
Considering that the FCA has not shared any information as to which companies are under investigation, there’s plenty of room for speculation. It is certainly true that there has been a high number of potential cryptocurrency scams registered in the UK, and we have covered a fair few of them on this website in the past. Even so, there are plenty of companies offering legitimate services which may still require authorization.
Whether or not anything will come of this investigation remains to be determined. It is good to see the FCA take this particular course of action, as cracking down on illicit cryptocurrency activity is of the utmost importance. Additionally, any regulation will help legitimize cryptocurrency as a whole. This is a pretty big development for the UK’s crypto industry, as Bitcoin and altcoins continue to attract a lot of attention.