UK finance watchdog warns investors, likens crypto hype to tulip mania

UK’s finance watchdog has warned investors away from swathes of low-level crypto firms operating without proper registration, reports Reuters.

At London’s City Week, the Financial Conduct Authority’s (FCA) head of enforcement and market oversight Mark Steward outed 111 such crypto businesses across the country.

“We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firms, consumers,” said Steward.

Mark Steward, Director of Enforcement @TheFCA likens consumer FOMO in relation to cryptocurrencies to “tulip mania” but warns many firms fall outside the FCA’s perimeter #CityWeek2021

— City Week (@cfcityweek) June 22, 2021

In addition to registering with the FCA, since January 2020 UK companies in crypto must adopt government guidelines on money laundering, terrorist financing, and the general transfer of funds.

Finance watchdog finds few registered

At press time, just five UK companies have fully complied, one of them being crypto exchange Gemini.

A larger number hold temporarily registrations (allowing trade while the FCA reviews their applications).

In June, the FCA extended those temporary registrations to 31 March, 2022, which were originally due to expire next month.

The FCA also maintains a database of nearly 150 unregistered “cryptoasset companies.”

Of those, Protos found some listed at addresses doubling as a beauty salon, a bookie’s, and a liquor store — the latter two likely house crypto ATMs.

[Read more: ‘British FBI’ deputy director spooked by luxury assets sold for Bitcoin]

The FCA recently reported about 2.3 million adults in the UK hold crypto in some form. Many investors fell into the highest-risk category — 35 or older and not particularly knowledgeable of the industry.

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