FCA Signals Crpyto Will be Brought into its Regulatory Sphere
Image copyright FCA, Pound Sterling Live.
As worries about contagion continue to plague the traditional banking sector, the risks of crypto are again being drummed home by the city watchdog the FCA although it's clear the door is opening to bring digital coins and tokens under the regulatory sphere.
Sarah Pritchard, executive director of markets at the FCA has stressed in a speech that crypto assets offer opportunities for more efficient and innovative financial services and products and should be explored.
But it’s clear the watchdog’s hands are tied without fresh government legislation giving it more power to regulate the crypto wild west.
"Despite the recent crypto winter, where massive losses were sustained, the take up of crypto is on the rise year-on-year. That means more consumers need protecting from the potential harms. And with more consumers and investors piling in, the risks also grow exponentially in our interconnected systems. That is why things have to change." - Sarah Pritchard in a speech delivered on April 25.
Time is of the essence given the numbers of investors who are piling in, despite the chill winds which blew on crypto asset prices during the crypto winter, which appears to be thawing.
The take up of crypto is on the rise year-on-year, with 67% of European institutional investors holding crypto and one in ten adults in the UK having owned digital coins or tokens at some point.
However, with so little protection they risk getting their fingers seriously burnt at a time when fraud is so rife and high-profile collapses like FTX demonstrate the lack of transparency within the industry.
Relentless warnings about the dangers of pouring money into high-risk investments are clearly not working, and with crypto turning mainstream, the regulator needs more powers to help police the space.