By
Chimamanda U. Martha
April 15th, 2024
As of now, 39 crypto-asset firms are operating in the UK legally. Also, 246 crypto-asset companies are currently operating in the UK without going through the necessary registration.
The growing crypto sector has long been associated with the increase in cyber crimes with a recent report by the UK financial watchdog confirming a similar trend. According to the Financial Conduct Authority (FCA), there were 8,568 suspected crypto scams between April 1, 2021, and March 31, 2022. This is said to be a 36% increase from the same period in the previous year as claimed by an annual enforcement summary.
The crypto sector dwarfed other financial sectors by more than doubling the runner-up of this category. This is part of the FCA’s campaign dubbed “ScamSmart.” The UK financial watchdog has recently doubled down efforts to warn consumers of the risk of investing in crypto.
During the annual public review meeting, FCA emphasized the importance of this project. In his speech, Nikhil Rathi, CEO of the UK’s financial watchdog said that investors must be prepared to lose all their money.
During the Year of the report, 432 crypto-related scams have been opened by the FCA. The reason is partly linked to the industry having the highest rate of consumers. According to the report, 79% had invested money in cryptos such as Bitcoin, Ethereum, etc when reporting possible fraud. This has motivated the FCA strategy of being “tough at the authorization gateway.”
“Setting high standards and acting quickly to crack down on problem firms will help ensure market and consumer confidence, supporting the integrity and growth of UK financial services,” said Sarah Pritchard, the FCA’s executive director of markets.
The FCA’s stringent strategy has forced some companies to withdraw their applications to focus on EU approval. The report has also disclosed that the difficulties in getting business approval in the UK are not only affected by digital asset firms. One out of five financial firms’ applications seeking to join the consumer investment market over the past year was either withdrawn or disapproved.
As of now, 39 crypto-asset firms are operating in the UK legally. Also, 246 crypto-asset companies are currently operating in the UK without going through the necessary registration.
Richard Lloyd, the interim chair of the FCA as of February disclosed that tackling fraud in the region is very complex and under-resourced. He mentioned that the UK spends $144 billion on this fight every year.