Incoming FCA Chief Calls For Tougher Crypto Laws
The incoming chairperson of the UK’s Financial Conduct Authority (FCA) stated that under his leadership, the crypto industry would have to face a lot more scrutiny and regulation.
“Crypto Facilitates Money Laundering”
Ashley Alder, who is set to lead the UK financial watchdog, has called for tighter crypto regulation in the country. He has claimed that crypto firms facilitate money laundering and therefore need increased oversight. Speaking to parliament membersat a cross-party Treasury select committee, Adler stated that crypto platforms are deliberately evasive about providing clarity and thus create risk for customer funds like conflicts of interest and unsegregated asset holdings.
“Our experience to date of [crypto] platforms, whether FTX or others, is that they are deliberately evasive; they are a method by which money laundering happens in size. [Crypto firms] bundle a whole set of activities which are normally segregated . . . gives rise to massively untoward risk.”
FCA And Government At Odds Over Crypto
Adler's comments and approach toward crypto are in stark contrast to the government’s plans for the country’s crypto industry. The U.K. government has in the past sought to establish a high-quality global crypto hub that fosters innovation and development in the industry. The goal has remained constant through the turbulent changing of the guards, where both former PM Liz Truss and current PM Rishi Sunak have maintained pro-crypto stances.
However the FCA has been holding on to its rigid stance against the industry. The regulatory body had conducted anti-money laundering tests, which eliminated 85% of the firms that applied for the license.
FCA Previous Leadership
The previous chair of the FCA, Charles Randell had also worked on imposing tight regulations on the industry. In March, the agency wrote to UK-based crypto exchanges and put pressure on them to comply with regulations, especially sanction laws against Russian accounts. This was after both Binance and Kraken had initially refused to implement the sanctions and refused to block Russian accounts. Soon after, in May, Randell spoke at length on the speculative nature of cryptocurrencies and questioned their legitimacy.
“When the price of Bitcoin can readily halve within six months, as it has done recently, and some other speculative crypto tokens have gone to zero… should people without any significant savings or financial experience be encouraged or permitted to buy speculative crypto at all?”
Both Randell and Adler’s comments and the overall changing views of the financial watchdog spell trouble for the crypto firms hoping to establish themselves in the United Kingdom.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.