UK FCA chief: Cryptocurrency promotion needs tighter regulation

The head of the UK’s FCA said in a statement that cryptocurrency promotion needs more oversight and the agency needs more powers to ensure investor protection.

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head of the UK’s Financial Conduct Authority has issued a statement calling for stricter regulation of platforms that promote cryptocurrencies. FCA chief Charles Randell was speaking at the Cambridge International Symposium on Economic Crime. He stated that regulators need to be given more powers to ensure investors are protected. This is in line with what US Securities and Exchange Commission (SEC) chairman Gary Gensler has said

.

The warning is primarily aimed at potential fraud and “pump and dump” schemes that continue to plague the market. He also said that more rules are needed for digital ads and influencers who actually have some influence on the market.

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In the speech, Randell also identified three key issues that need to be addressed, namely:

  • Make it harder to use cryptocurrencies for financial crimes
  • Encourage useful innovation
  • “The extent to which consumers should be free to buy unregulated, purely speculative tokens and take responsibility for their decisions to do so.”

Randell’s speech indicates that the FCA does not intend to impose draconian laws on the cryptocurrency market. Rather, it wants to encourage innovation, so this only means addressing crime and investor protection standards. This seems to be the position that most countries are taking.

The FCA earlier this year issued a warning to the public

about Binance, reminding them that the exchange was not licensed. Binance responded to this by saying that it had done nothing wrong and would strive to comply with compliance standards.

Randell also warned potential investors against funding assets that are promoted by celebrities. In the warning, he pointed to a recent post on Instagram by Kim Kardashian-West promoting Ethereum

Max. Saying that it “could have been a financial promotion with the single largest audience reach in history,” the FCA chief used Kardashian’s post to highlight his concerns.

While he doesn’t completely dismiss cryptocurrencies, he remains cautious when it comes to assessing the value of digital assets. For this reason, he says influencers and advertising need to be more heavily scrutinized because millions of people could be drawn into <a href=”https://beincrypto.pl/learn/scam-kryptowaluty-oszustwa-bitcoin-2020/” target=”_blan

k” rel=”noopener”>scam.

Randell also acknowledges the difficulty of regulating cryptocurrencies. According to him, this can create a “halo effect that raises unrealistic consumer protection expectations.” In any case, it looks like the UK is preparing for regulation, which could have an impact on the market.

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