FCA announces that it will begin its crackdown on the ‘Wild West” of finance sector on October 8, 2018. Crypto ownership more than doubled in the UK last year, the Financial Conduct Authority said on Wednesday, as it announced an October start date for its clampdown on mis-selling in a sector often dubbed finance’s “Wild West”.
Nearly one in ten people surveyed by UK’s top financial regulatory body owned cryptocurrency in 2022. This is more than double the number of a year ago, despite regulators’ warnings that crypto investors must be prepared to risk losing their entire investment.
“It’s up to the people whether they decide to buy crypto. . . Sheldon Mills is the FCA’s director of competition and consumers. He also said that the FCA’s crackdown on crypto-group advertising will begin on October 8th.
The update from the regulator comes after a tough week for the crypto sector, which saw two of the largest exchanges in the industry, Binance and Coinbase sued over alleged securities laws violations by the US Securities and Exchange Commission.
The UK recently proposed a new regulatory framework for crypto, where the rules will be more closely aligned with those that govern traditional financial services. Recently, a cross-party group MPs criticised the policy and suggested that instead crypto be overseen as a form gambling.
The FCA polled 2,000 adults and found that 36% had heard or seen crypto ads. 25% of those who were not interested in crypto before became “curious”.
The FCA’s Crypto Marketing regime requires companies to provide risk warnings, and a “24 hour cooling-off period”. Customers will no longer be able to receive incentives for referring a friend.
The regime applies to all businesses that market crypto assets to UK clients, whether they are located in the UK or abroad. Mills stated that the crypto industry must prepare for this major change.
Harry Eddis of Linklaters said that the new rules would make it more difficult for people to purchase crypto currency in the UK.
The FCA regulates crypto companies only for money laundering compliance. The research showed that 28 percent of people who don’t use crypto would “more likely” buy it if regulation was similar to traditional financial services.
The rise in crypto asset ownership has occurred despite a turbulent period for the market. Last year, the market suffered from a crisis of trust that led to and the collapse of the former industry leader FTX.
Research also shows that almost four-fifths (nearly 45%) of crypto buyers used their disposable income, while 6 percent borrowed money and the remainder used their savings or profits from crypto sales.
Their average investment was just below PS 1,600. Forty percent of respondents held less than PS 100. According to 40% of respondents, the most common reason for purchasing crypto was “as gambling”.
On Wednesday, the price of Bitcoin, a popular cryptocurrency that peaked at over $64,000 in November 20,22, fell by nearly 3 percent to $26,484.
This week, the United States has seen a wave of enforcement cases .
The SEC filed a lawsuit on Monday against Binance. It alleged that the world’s biggest crypto exchange had mixed billions in customer funds with a separate firm owned by Changpeng Zhao, its chief executive.
The SEC filed a lawsuit against Coinbase on Tuesday. It alleged that it had violated US securities laws by not registering as a national securities exchange, clearing agency, or broker.