UK's FCA Says Crypto Regulation Can Backfire

by in Cryptocurrency News

UK FCA crypto

Today, September 9, UK's Financial Conduct Authority (FCA) published the speech of Charles Randell, Chair of the FCA and Payments Systems Regulator. The release titled "Risks of token regulation", discusses several issues that the regulatory finds are present in the crypto industry.

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The speech was written for the Cambridge International Symposium on Economic Crime. Charles Randell mentioned three points that legislators need to consider: The first one is to find solutions that will prevent using digital tokens for financial crime. The second one is how to support innovations and last but not least define to what extent consumers should be free while buying speculative tokens and take responsibility for their decisions.

Talking about speculative tokens and possible scams, the FCA chair pointed out the role of influencers and paid-for advertising particularly.

Charles Randell talked about celebrity Kim Kardashian's recent Instagram promotion of Ethereum Max. He said it's a brand new token launched by "unknown developers". Although Randell stated he can't say whether Ethereum Max is a scam or not, he finds regulators should stop campaigns through which influencers mislead under-informed consumers.

The FCA chair emphasized the fact that about 2.3 million U.K. citizens currently hold crypto. Although a significant percentage of citizens think the FCA or the U.K.’s Financial Services Compensation Scheme can protect their funds if something goes wrong, it's not so.

Presently, the FCA regulates crypto exchanges and doesn't allow the sale of crypto derivatives to retail consumers. Rendell says the FCA's measures must go forward and be focused on stablecoins and security tokens.

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He says both of them have encouraging useful ideas for cross-border payments, financial infrastructures, and financial inclusion.