UK financial watchdog probes 300 crypto startups in 6 months

The UK's top financial watchdog says it opened 300 probes into unauthorized crypto operators between April and September last year.

The UK’s top finance watchdog opened 300 probes into crypto startups in just six months last year, reports the Financial Times.

Many of the crypto probes launched by the Financial Conduct Authority (FCA) — equivalent to the US Securities and Exchange Commission (SEC) — related to scams. The probes were opened in the six months ending in September.

The agency noted however that some appeared to be conducting crypto asset activity without registering with FCA regulators, although there was a degree of overlap with these companies and outright scams.

UK-based crypto firms must register with the FCA to ensure they comply with anti-money laundering (AML) laws.

Similarly to the SEC, the UK agency oversees regulatory compliance for financial firms. It investigates allegations of know-your-customer (KYC) and AML violations, and tracks down unlicensed financial operators.

In total, the FCA received complaints for about 4,300 potential crypto scams in the same six-month period, more than any other category.

The FCA said it now maintains a list of around 250 unauthorised crypto entities operating in the country. Addition to the list does not mean the firms have been charged with any wrongdoing.

Generally, the FCA is concerned that average investors are betting with more than they can afford to lose.

The watchdog has issued many warnings about unregulated crypto firms, for example Binance and Luno, and says cryptocurrencies are “very high risk, speculative investments.”

Read more: [UK finance watchdog warns investors, likens crypto hype to tulip mania]

It also reminds the public that it often cannot assist users in recovering lost funds from unregulated service providers.

Politicians have put pressure on the agency to increase enforcement in the crypto sector amid allegations that countries like Iran and Russia use digital assets to skirt sanctions.

Domestic policy concerns involve crime rings using unregistered crypto firms for money laundering in the UK.

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