TL;DR
- The Financial Conduct Authority (FCA), HMRC and the Metropolitan Police have searched three premises in London on suspicion of illegal cryptocurrency trading.
- Cease and desist notices were issued.
- The action involved unregistered P2P companies, not licensed UK exchanges.
The Financial Conduct Authority has intensified its enforcement action against illegal peer-to-peer cryptocurrency trading in London.
Working with HMRC and the Metropolitan Police, the regulatory body inspected three business premises suspected of running unregistered cryptocurrency businesses.
The procedure took place on September 10, and the Financial Supervision Authority published its details on September 17.
The teams issued cease and desist notices and collected intelligence from the companies involved.
This was about unregistered trading
This distinction is important because the UK is in the middle of a wide-ranging reform of cryptocurrency regulation.
The FCA’s new licensing portal will open at the end of September, but firms are already facing rules around anti-money laundering registration and financial promotion.
Physical or P2P companies operating outside this framework remain targets for enforcement.
The latest measure appears to directly target this segment of the market.
There is no evidence that the FCA is suddenly targeting licensed exchanges or shutting down mainstream cryptocurrency trading.
Implementation and licensing move together
The timing is interesting.
On the one hand, the FCA is creating a clearer path for cryptocurrency companies that want to operate under the upcoming regulatory regime.
On the other hand, it increases pressure on companies that operate outside the rules.
These two things go together.
The licensing system means little unless companies that ignore it face consequences.
For legitimate companies, this can ultimately be beneficial.
Adhering to clear rules is expensive, but difficult to justify if competitors can simply ignore them.
The FSA’s message has become fairly clear.
The UK wants cryptocurrency companies.
They are also increasingly expected to behave like regulated financial companies.
Source: Financial Conduct Authority. https://www.fca.org.uk/news/press-releases/fca-and-partners-continues-crackdown-illegal-crypto-trading
This article was written by the News Desk and edited by Samuel Ray.