FCA Investigated 300 Probes Related To Crypto Businesses In 2021

50 Crypto Businesses Under Investigation

In a press release published on Thursday (March 3, 2022), the Financial Conduct Authority (FCA) revealed that the agency received 16,400 inquiries concerning possible scams between April and September 2021. The most common type of scams included boiler rooms, cryptocurrency scams, and recovery rooms.

Notably, there was an increase in reports related to crypto scams. The latest FCA data showed that the agency’s ScamSmart website – where investors can view lists of firms operating without the FCA’s authorization and also get an insight about risks associated with an investment – saw a 49% uptick in reports about cryptocurrency-related scams between April and September 2021.

Within the same period, the FCA opened 300 cases involving unregistered crypto businesses, adding that there were “50 live investigations, including criminal probes, into unauthorized businesses.” Furthermore, the regulator added over 170 firms to its Unregistered Cryptoasset Businesses list in the six months.

The UK watchdog continues to emphasize that crypto companies seeking to operate in the country need to fulfill the FCA’s stringent requirements. Meanwhile, the FCA said that it is dedicated to ensuring consumer protection, and the agency would employ assertive measures to stop scam projects from penetrating the United Kingdom.

A statement from Sarah Pritchard, the FCA’s Executive Director of Markets said:

“Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be. Before investing, check if you know who you are really dealing with, check if they are authorized by the FCA and do your research to understand the risks that might be posed. Find out how to avoid scams on the ScamSmart website and get tips on investing safely on the InvestSmart website.”

UK Regulators Working to Curb Misleading Crypto Promotions

The FCA is also looking to monitor the promotion of high-risk investments such as cryptocurrency, and take action against crypto advertising that could potentially harm consumers. Earlier in January 2022, the UK regulator began to seek public consultation on proposals aimed at tightening rules for the promotion of crypto products. The FCA will accept all feedback by March 23, 2022.

Back in September 2021, the financial regulator said it wanted to regulate online promotions of cryptocurrency to protect inexperienced investors. FCA chairman Charles Randell noted an increase in the number of celebrities promoting crypto assets and was worried that fans would easily buy into the hype of such products.

Also, the Advertising Standards Authority (ASA) has been cracking down on misleading crypto adverts, classifying most ads as irresponsible, despite arguments from crypto companies stating that they used the necessary disclaimers.

Recently, ASA banned a campaign ad promoting the meme coin Floki Inu. According to the agency, the advert exploited investors’ lack of crypto knowledge and minimized the risk associated with cryptocurrency investment. Cryptocurrency ads from Coinbase, Luno, Kraken, among others, were also prohibited by ASA.

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