The United Kingdom’s National Audit Office (NAO) has raised concerns about the effectiveness of the Financial Conduct Authority (FCA) in regulating the cryptocurrency industry.
In a recent report titled ‘Financial Services Regulation: Adapting to Change’, the NAO stated that the FCA has been slow to respond and act against illegal activities in the crypto industry.
High staff turnover rates and a lack of specialist skills increase risk to @TheFCA's key commitments.
It has responded by recruiting and spending £317m on its change programme.
This should help it prepare financial services for the future.
— National Audit Office (@NAOorguk) December 8, 2023
The high rate of staff turnover and the lack of specialist skills increase the risk of FCA.
It responded by recruiting and spending £317m on its regeneration program.
This will help you future-proof financial services.
The NAO highlighted that it took the FCA almost three years to act against illegal crypto ATM operators. On July 11, Cointelegraph reported that the FCA closed 26 cryptocurrency ATMs as part of a coordinated investigation. Meanwhile, the NAO says:
“While the FCA has required crypto asset firms to comply with anti-money laundering regulations since January 2020, and has begun supervisory work, including involving unregistered firms, it has not yet begun to implement the action against the operators. “illegal crypto ATM transactions until February 2023.”
The NAO claimed that the delay in the registration of crypto companies seeking regulatory approval from the FCA was due to the absence of specialist crypto staff.
“For example, the lack of crypto expertise has caused the FCA to take longer than planned to register crypto asset companies under anti-money laundering regulations,” the report said.
On January 27, Cointelegraph reported that the FCA approved only 41 out of 300 applications from crypto companies seeking regulatory approval, since the rules came into effect in January 2020.
This comes after the FCA recently published guidance material to help crypto businesses better understand the new crypto promotion rules that have just come into effect.
On November 2, Cointelegraph reported that the FCA had released “finalized guidance apart from the manual” for compliance with the new rules.
The new rules specifically address how crypto companies are allowed to make promotions to customers.
The FCA has flagged issues such as crypto companies making claims about the ease of using cryptocurrencies without highlighting the risks involved, as well as insufficient risk warnings. visible and in small fonts.