This action underscores the UK’s stringent approach to regulating the rapidly evolving cryptocurrency market, ensuring that businesses comply with the law to protect consumers and the financial system.
The Financial Conduct Authority (FCA) and the Metropolitan Police Service have taken action against two individuals in London suspected of operating an illegal cryptocurrency exchange. The FCA announced in a press release that they believe over £1 billion ($1.2 billion) in unregistered cryptocurrency was traded through this business.
The identities of the arrested individuals and the name of the exchange remain undisclosed. During their investigation, the FCA conducted inspections at the suspects’ offices and homes, seizing several digital devices. The two suspects were interviewed by the FCA and have been released on bail while the investigation continues. Therese Chambers, the FCA’s executive director of enforcement, stated that this action demonstrates the agency’s commitment to stopping illegal crypto firms from operating in the UK.
UK’s Commitment to Crypto Oversight
From January 10, 2021, any crypto asset business in the UK must register with the FCA under regulations aimed at preventing money laundering and terrorist financing. These regulations, known as the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), give the FCA the authority to impose restrictions on crypto businesses. It is a criminal offense to violate these restrictions. As a result, not all international crypto companies have been allowed to operate in the UK. Companies like Binance and Bybit, for instance, have faced bans following FCA crackdowns.
The FCA has stringent criteria for approving crypto business registrations. Since becoming the supervisor of the crypto market, only 14% of the applications submitted have been approved. Out of 320 applications, only 45 businesses have successfully registered.
In early May, the UK Treasury released a report detailing its efforts over the past two years to monitor the crypto market. The report, titled “Anti-Money Laundering and Counter-Terrorist Financing,” highlighted that between 2022 and 2023, the FCA scrutinized the activities of 238 firms. About one-third of the FCA’s staff is involved in overseeing crypto-related operations, showing the significant resources dedicated to regulating this sector.
This recent action by the FCA underscores the UK’s stringent approach to regulating the rapidly evolving cryptocurrency market, ensuring that businesses comply with the law to protect consumers and the financial system.
