Strong supervision is coming? UK FCA will review 87 companies related to cryptocurrency

Recently, the UK Financial Market Conduct Authority (FCA) has taken tough measures against encryption-related companies.

According to the Financial Times, the UK FCA is investigating 87 cases related to digital assets, 74% higher than the same period last year and only 50 last year.

In addition, FCA's previous statistics show that in the past fiscal year, the number of cryptocurrency and foreign exchange fraud reports has more than doubled, reaching more than 1,800. According to regulatory estimates, users lost at least £27 million due to cryptocurrency and foreign exchange fraud.

Currently, the UK has not regulated the transfer, purchase and sale of cryptocurrencies. This means that if problems arise, consumers are often not protected by the UK Financial Services Compensation Plan.

Industry experts believe that this tough regulatory attitude in the UK is a positive development as it demonstrates FCA's determination to enforce the cryptocurrency market. And, it is a kind of protection for legally operated cryptocurrency companies and investors.

Earlier, Bank of England Governor Carney also said that the cryptocurrency is not a systemic risk. We do not think that the cryptocurrency is ready for the development period and should be added to the regulatory system.

Proposed ban on UK crypto derivatives

Recently, in addition to companies closely related to cryptocurrencies, the UK FCA also stated that derivatives and exchange-traded notes involve certain cryptographic assets and are not suitable for retail consumers who cannot truly assess value and risk. FCA recommended in a public consultation document that it is prohibited to sell such products to retail customers. But it will announce changes in the final rules by early 2020.

In response, Reuters reported that the World Federation of Exchanges (WFE) on Monday urged UK market regulators not to ban derivatives transactions related to crypto assets such as Bitcoin, saying they are ready to protect consumers on their platforms. . In some cases, cryptographic assets have attracted considerable consumer interest, giving market participants the prospect of profitable new business activities.

The Global Exchanges Association said it is necessary to find the right balance between allowing innovative products to be traded in the UK and ensuring that consumers are protected.

The World Exchange Alliance has more than 70 members, including exchange giants such as CME Group, Nasdaq and Intercontinental Exchange (ICE). If the ban continues next year, the WFE will review it at the specified time.

For Libra, UK regulators have different attitudes

For Libra, which has made a big splash around the world this year, European and American regulators and politicians are more skeptical about its ability to subvert the world financial system, damage privacy and fuel money laundering.

Facebook has met with the UK Treasury, central banks and regulators three times in the weeks before the announcement of its Libra digital currency program, but British regulators have different attitudes toward it.

In the eyes of the British FCA, Libra is a threat to the existing financial ecology.

Christopher Woolard, executive director of strategy and competition for FCA in the UK, previously said that Libra could disrupt the existing financial ecosystem and make traditional payment institutions redundant.

In addition, UK law enforcement agencies also support strong regulation of Facebook.

In the US Department of Justice demanding that Facebook stop the end-to-end encryption program, urging the company not to continue to move forward without "ensure that user security is not affected", the US, UK and Australia international law enforcement partners jointly issued an open letter to Facebook They are worried that end-to-end encryption will prevent law enforcement from handling illegal activities through the Facebook messaging platform.

They believe that Facebook should “enable law enforcement to legally obtain content in a readable and usable format” and effectively provide relevant departments with a back door to deliver information via WhatsApp, Instagram and Messenger. It will ask Facebook to work with the government to ensure this. Bloomberg reported that according to a new agreement between the United Kingdom and the United States, US social media platforms, including Facebook and WhatsApp, will be forced to share user encrypted information with the British police.

But Bank of England Governor Mark Carney is more optimistic about Libra. Carney has urged the Libra-type reserve currency to end the dollar's dominance and called for a multi-polar reserve currency system. He said that reducing the dollar spill should be a long-term goal. In addition, he said that Facebook's cryptocurrency Libra must solve a series of basic problems.

According to the BBC, Mark Carney also said in a speech that Facebook's new digital currency Libra can significantly reduce costs and increase financial inclusion.

However, although Carney said that he is open to this, but does not provide open doors, Libra will be subject to corresponding supervision. He has said that

"Libra must be absolutely reliable from the start."

Source: Shallot blockchain