Governments around the world are closely monitoring cryptocurrency companies. In the United Kingdom, the FCA is stepping up its efforts. The most recent decline in Bitcoin prices generates many additional concerns regarding these service providers. Furthermore, many companies seem to keep shady business models.
UK FCA continues Crypto Crackdown
Investigating cryptocurrency companies makes sense for government agencies. There are many unknown factors regarding these business models. Furthermore, the lack of active regulation allows the shady business models to flourish. in the United Kingdom, no progress has been made to regulate the cryptocurrency industry. This forces the FCA's hand to act effectively.
A growing number of requests have become evident in these companies. Local sources said that more than double the investigations are currently under way. It is believed that over four dozen companies are currently under review. Compared to May 2018, only 24 companies were under official investigation. Back then, the cases concerned companies that operated without legal permission. It is not clear whether the current requests concern the same aspect.
Surprisingly, the FCA received half a dozen complaints. These reports are presented to the agency by employees of existing cryptocurrency companies operating in the United Kingdom. A very particular trend, considering that no such reports were presented in the previous three years. It seems that something is brewing in the UK cryptocurrency sphere, although it may not necessarily be a positive trend.
Financial losses make people nervous
This growing number of cryptographic investigations in the UK is not necessarily unique to that region. In the United States, the SEC has also started investigating more companies in recent times. Similar efforts were noted in all the individual states of the United States, which regularly issue letters of termination and revocation to companies. This is a positive development, as investigations bring more legitimacy to the industry.
Furthermore, another reason for this in-depth review is not difficult to find. The increase in Bitcoin prices last year and at the beginning of 2018 still raises many questions. The subsequent fall in prices – which is still ongoing – makes this sector even more suspect. It is normal that the authorities want to ensure that nothing nefarious happens. Many people have invested hard-earned money in cryptocurrency and now face substantial losses.
This price drop is also a positive trend, in a strange way. Andrew Jacobs, an industry expert, believes that this development exposes any fraudulent activity. As FCA intensifies its efforts, it will become harder to get rid of any illegal activity. This will help to improve the cryptocurrency industry in the United Kingdom. For now, the outcome of any ongoing investigation is not clear.
What do you think of the greater control over the cryptocurrency industry? Let us know in the comments below.
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