The Financial Conduct Authority (FCA), the United Kingdom’s financial watchdog, is investigating 18 companies in connection with cryptocurrency transactions amid market threats, according to a Sunday Telegraph report.
Rising investment risks triggered by the plummeting value of Bitcoin and other cryptocurrency prices in 2018 have alarmed the agency, and since November 12, it has initiated inquiries into 67 UK-based firms dealing in cryptocurrencies.
Although the agency has closed the inquiry on 49 firms, it has issued consumer alerts for 39 firms, as per the Sunday Telegraph, which acquired the information from the FCA via a Freedom of Information request.
The FCA, however, did not make details public and denied to publicly announce the name of 18 firms under ongoing probe.
Similar to most countries, the cryptocurrency industry in the UK is not fully regulated yet. Tokens are considered commodities in the UK, which are not the FCA’s concern – but cryptocurrency derivatives are. The FCA has, like many other regulators, divided tokens into three groups for the purpose of classification – currency, security, and utility.
However, with the growing investments risks in the volatile crypto market, the UK government, earlier this month, put forth its intention to equip the FCA with more power to crack down the suspicious looking blockchain businesses.
Bank of England looking to encourage the industry
According to the report, Christopher Woolard, the executive director of strategy and competition at the agency, thinks that the crypto assets posed ‘potential harm’ to consumers and are devaluing the UK’s financial market integrity.
However, the UK’s established institutions are not entirely against crypto. Woolard further clarified that the FCA, HM Treasury, and the Bank of England are considering to take necessary steps in the coming months to mitigate the market threats and encourage the nascent industry for ‘beneficial innovation.’
In November, one of the executives at the FCA revealed the agencies intentions to put a ban on the sale of cryptocurrency contracts-for-difference (CFDs) to retail investors.