FCA too slow on crypto enforcement, says UK’s spending watchdog
The UK’s National Audit Office (NAO) has accused the country’s Financial Conduct Authority (FCA) of enforcing crypto laws too slowly and said that a shortage of crypto-savvy staff has caused delays in registering crypto firms.
That’s according to today’s report published by the NAO, a non-government entity tasked with scrutinizing public spending. It claims crypto-assets may be a key area of uncertainty capable of hindering the FCA’s ability as a regulator.
In its key findings, the report states “there can be a significant delay between the FCA identifying an issue to tackle, and it taking regulatory action.” It cited the FCA’s slow approach to cracking down on illegal crypto ATMS.
“While the FCA has required crypto-asset firms to comply with anti-money laundering regulations since January 2020, and began supervision work including engaging with unregistered firms, it did not begin taking enforcement action against illegal operators of crypto ATMs until February 2023,” the report explained.
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In addition, it claims a shortage of crypto skills among staff has made the FCA “take longer than planned” to register crypto-asset firms under money laundering regulations.
“The FCA has experienced high staff turnover, including at senior levels, in recent years,” the document reads. “While turnover for the FCA as a whole has now fallen, delivery risks remain high in some specialist areas.”
The report states the FCA found employing and retaining staff with crypto compliance skills “difficult” because of competition from other employers.
The FCA has reportedly dealt with over 1,400 cases related to illicit crypto activity between January 2020 and June 2023. It has also received over 13,350 reports of crypto scams between 2020 and the first half of 2022, all the while overseeing 50,000 companies across the UK.
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