By Shelly Melancon (Switzerland)
After a January notice sent to all UK crypto-related firms by the financial conduct authority (FCA), the agency has warned that customers should thread with caution when dealing with 111 cryptocurrency firms in the country. Those on the list are crypto firms that are yet to register with the FCA.
Part of the regulatory watchdog’s responsibility is to register and legalize crypto firms and ensure that these crypto firms comply with anti-money laundering (AML) and counter-terrorism financing laws.
Hence, it has warned that customers shouldn’t deal with any firm that doesn’t show proof of its registration with the FCA. Also, the FCA revealed that about 52 crypto-related firms couldn’t meet its requirements for anti-money laundering regulations and has since withdrawn their registration application.
The financial regulatory body said such firms would have to stop any business transaction. But if they were found still operating, they would be fined and subjected to legal laws till they complete their registration of complying with the FCA’s AML policies.
With these new laws, there might be fewer crypto trading activities. Consequently, the current bearish trend in the crypto space might continue.
UK’s Crypto Adoption Increases
The growing popularity of virtual assets in the UK has caused a rise in the adoption of cryptocurrencies in the country. A new survey conducted by the FCA revealed that about 2.4 million UK adults now own virtual currencies, a remarkable rise from the slightly over 1.8 million adults who owned last year.
Also read:The survey also discovered that more citizens now have a greater awareness and better understanding of cryptocurrencies, reflecting the rise of crypto ownership volumes. Also, one of the UK’s largest online investment platforms, AJ Bell, corroborated the FCA survey result. It discovered that most British adults would prefer to invest in crypto than stocks and shares.
While commenting on the survey results, Laith Khalaf, one of AJ bells’ financial analysts, said it seems the world is now “crypto crazy.”
IFAs Still Wary About Cryptocurrencies
While there is growing adoption of digital currencies in the UK and other parts of the world, UK’s independent financial advisors (IFAs) and regulators have shown through their actions that they are yet to embrace the crypto world. An independent survey of most IFAs in the country revealed that 94% of them would not suggest crypto investments or meme stocks to their customers because investing in digital currencies and meme stocks is highly risky and volatile.
While many more people would want to invest in these virtual assets, they are likely to be discouraged by the actions of the financial regulatory authorities. Hence, UK’s nascent cryptocurrency adoption may suffer a huge setback.
Hence, the country and its citizens may lose any benefits they are supposed to gain from the early adoption of these virtual assets. Perhaps, UK authorities remain reticent about encouraging their citizens to adopt cryptocurrency because of the current high rates of crypto-related money laundering activities found by the security agents in the country.
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