FCA Urges Crypto Platforms to Prepare for Widespread Increased Supervision


September 7, 2021, | AtoZ Markets – The head of the UK Financial Conduct Authority (FCA) Charles Randall expects digital token-issuing projects to register “just within reach” of his agency. He made this comment while speaking at the Cambridge University International Symposium on Economic Crime.

Randall believes that tokens used in speculative investments pose risks to a vulnerable segment of the population. At the same time, he acknowledged that excessive supervision can also have negative consequences, as it creates a “halo effect” associated with unrealistic expectations in the field of consumer protection.

One thing is clear: because of the decentralized method of creating these speculative tokens, any effective regulatory system will require a business to register exactly within our reach, with people and resources we can turn to to regulate and enforce our requirements,” he said.

Earlier, the FCA said that the model of interaction with the Binance exchange does not allow regulating its activities. Randall stressed that companies that fail to disclose the basic aspects of their device, as was the case with Binance, will not be officially admitted to the market.

It is imperative that any regulation of the promotion of cryptocurrency assets requires clear disclosure of risks and does not allow the impression that the token itself is subject to regulatory oversight or has regulatory approval,” he added.

The head of the department also noted that digital tokens have existed for only a few years, so the state has not yet had the opportunity to assess the “full financial cycle”.

We just don’t know when or how this story will end, but as with any new speculation, there is a possibility that it will not end well,” Randall said.

A way out of this situation, he said, will require work in three main areas. First, it is necessary to make it difficult to use cryptocurrencies in crime; second, ways to support beneficial innovation should be identified; third, it is necessary to decide how permissible it is to allow consumers to participate in certain speculative opportunities.

Read also: FCA Extended the Temporary Registration Regime for Crypto Firms

The wave of regulation is sweeping the world, and online platforms must look to a future where regulators respond to the significant risks they pose as they would in any other business. The same risks – the same regulation,” he summed up.

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