Thursday, April 9, 2020

FCA increases scrutiny for cryptocurrency businesses

The Takeaway:

The U.K.'s Financial Conduct Authority have changed their attitude towards the crypto community as they take a tough approach towards crypto-related companies. According to the regulator's estimates, customers lost about £27 million to cryptocurrency and foreign-exchange scams. Due to this, FCA has decided to investigate 84 crypto-related companies, and the regulator is using a tough approach for this.

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The Financial Conduct Authority(FCA) in the U.K. had taken a rough approach towards the crypto-related companies when it was discovered that people had lost almost £27 million to cryptocurrency and foreign-exchange scams.

The financial institution took a harsh step towards the crypto-related businesses as they decided to investigate 87 cases related to digital assets. This number has increased by 74% as compared to last year. However, the crypto industry considers this approach as good news for them as they believe that FCA is determined to help the cryptocurrency market act within the law.

Regulators said that people are more vulnerable to fraudulent “get-rich-quick schemes” and since crypto businesses don’t need physical assets or initial investment, it becomes easier to misuse them. Scammers use various ways to make the scams look more legit and try to fool people.

Fraudsters, on the other hand, use the old boiler room schemes where they promise high returns pushing people to invest more. Whenever the investors reach out to withdraw their investments, these fraudsters disappear with the funds, or they stop responding to the queries.

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Cheng Wei Chan
Cheng Wei Chan
Cheng is an AI & APP Engineer based in Taipei City, Taiwan. After completing his graduation in Computer Science from National Taiwan University, he dedicated his life into researching and writing about technologies such as blockchain, cryptocurrency, artificial intelligence and application development.

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