FCA UK ICO Investigation: Will ICO be regulated in the UK?

As ICOs gain worldwide popularity, the speculative interest rises. Following this trend, FCA UK ICO Investigation might lead to the UK ICO regulation framework adoption.

8 September, AtoZForex The UK’s Financial Conduct Authority (FCA) has emerged as one of the latest global regulators to examine initial coin offerings (ICOs). The ICOs sell digital tokens to investors in exchange for the cryptocurrency, such as Bitcoin and Ethereum.

FCA UK ICO Investigation: Will ICO be regulated in the UK?

The UK financial watchdog has informed the public that it was keeping an eye on ICOs. In the period of the last 12 months, ICOs have gained crazy popularity. Rapid price spikes of digital tokens that were issued in the past year have attracted some speculative interest to the market.

In its April discussion paper, the FCA stated that the rules that protect investors and determine what should be disclosed by an issuing company could apply to ICOs. This is depending on the structure of ICO.

Moreover, markets expect that the FCA will publish additional work on ICOs this year. The discussion paper from the FCA stated:

“Initial coin offerings have various parallels with Initial Public Offerings, private placement of securities, or crowd sales. Depending on how they are structured, they may, therefore, fall into the regulatory perimeter.” 

Cryptocurrencies Black Monday

FCA’s spokesman on Wednesday states that ICOs “are an issue that the FCA is aware of and has been looking at”.

Also, earlier this week, we witnessed some unexpected China and South Korea cryptocurrency regulations, with Chinese authorities completely banning ICOs in the country. According to the official statement by the People’s Bank of China and some other Chinese regulatory authorities:

  1. Organizations and individuals must not raise funds through ICO activities.
  2. Fundraising platforms must not provide trading and exchange services.
  3. Banks and financial institutions must not do any business related to ICO trading.
  4. Organisations and individuals who have completed funding through an ICO should make arrangements to repay investors.

Furthermore, it is worth to note that China has one of the biggest demands for ICOs and cryptocurrencies in the world. The announcement from China has pushed down the price of Bitcoin, the king of the top cryptocurrencies. After the drastic decision from Beijing, Bitcoin has dropped as much as 12.6 percent to $4.046. Afterward, it has risen back to $4,309.

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