The United Kingdom appears to be operating in the same light as the U.S. with regard to its stance on cryptocurrencies. Further warnings and banking clampdowns have occurred, the latest coming from the Financial Conduct Authority (FCA).
FCA head of enforcement and market oversight Mark Steward issued the warning at a weekly virtual summit, stating that these crypto companies were high risk, volatile and unregulated. He declared that there were 111 of them operating in Britain without necessary registration according to Reuters.
Crypto Company Crackdown
The financial watchdog is clearly concerned about crypto companies working with U.K. banks and payment services:
“We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firm, consumers. This is a very real risk so we are worried about that.”
Since January, businesses dealing with digital assets have had to obtain full FCA registration before they can begin trading. According to Steward, very few have which pose a significant financial crime risk.
Just like in the U.S., the U.K. seems more concerned with money laundering and crime than regular citizens trading or investing in cryptocurrencies. However, Steward went on to reiterate the tired old arguments that came out during the previous bull market that crypto is a bubble:
“The reason many are investing now is because they have a fear of missing out on what might be a boom. Leaving aside how volatile these instruments actually are, it has tulip mania written all over it.”
Earlier this year, the FCA banned crypto-related derivatives trading.
Brits Want Their Bitcoin
An estimated 2.5 million, or 3.6% of the U.K. population, hold crypto assets according to the report, a number that has surged during pandemic-induced lockdowns.
A recent FCA survey revealed that about half of cryptocurrency holders in the U.K. plan to increase their exposure trusting that “they’ll make money at some point.” It added that the average investment, which went from £260 to £300 in one year, equates to around £1 trillion in the portfolios of small retail investors in Britain.
Unsurprisingly, Britain’s banks and regulators are not so enamored. On June 20, CryptoPotato reported that leading U.K. bank TSB had taken action to prevent its customers from interacting with crypto exchanges such as Binance.