The National Audit Office (NAO) in the United Kingdom has raised concerns about the effectiveness of the Financial Conduct Authority (FCA) in regulating the cryptocurrency industry.
recently report Entitled ‘Financial services regulation: adapting to change’, the NAO claimed that the FCA is being slow to respond and take action against illegal activities in the crypto industry.
Risk increases due to high staff turnover rates and lack of specialist skills @TheFCAMajor commitments.
It has responded by recruiting and spending £317 million on its transformation programme.
This will help it prepare financial services for the future.
More: https://t.co/U66ep8J8Sp pic.twitter.com/GtG5TAjl4t
– National Audit Office (@NAOorguk) 8 December 2023
The NAO highlighted that it took almost three years for the FCA to take action against illegal operators of crypto ATMs. On July 11, Cointelegraph reported that the FCA had Close 26 Crypto ATMs As part of a coordinated investigation. Meanwhile, the NAO said:
“Although the FCA has required crypto-asset firms to comply with anti-money laundering rules since January 2020, and has begun supervisory work, including engaging with unregistered firms, it has postponed enforcement against illegal operators of crypto ATMs until February 2023. “Action has not been initiated.”
The NAO claims that delays in registering crypto firms seeking regulatory approval from the FCA were attributed to the absence of specialized crypto personnel.
“For example, a lack of crypto skills meant the FCA took longer than planned to register crypto-asset firms under money laundering rules,” the report said.
On January 27, Cointelegraph reported that the FCA has Out of total 300 crypto firms, 41 were approved Applications seeking regulatory approval since the rules came into effect in January 2020.
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This comes after the recent FCA Guidance material released to help crypto firms Better understand the new crypto promotion rules that recently came into effect.
On November 2, Cointelegraph reported that the FCA issued “final non-handbook guidance” for compliance with the new rules.
The new rules specifically relate to how crypto companies are allowed to promote to customers.
The FCA highlighted issues such as crypto firms making claims about the ease of using crypto without highlighting the risks involved, as well as risk warnings not being visible enough in small font.
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