24 Crypto Firms Under Scrutiny by UK Watchdog to Decide if Consumers is at Risk
The Financial Conduct Authority (FCA) is launching investigations into 24 different cryptocurrency companies. The U.K.’s financial watchdog did not name which specific businesses they were inspecting.
The move comes as regulators close in on the free-wheeling cryptocurrency industry, which raised billions of dollars last year through a novel fundraising method called initial coin offerings. US regulators have brought fraud charges against a number of ICOs.
The 24 companies face inquiries by the Financial Conduct Authority into whether they traded without the proper authorisation.
It comes amid a crackdown on so-called cryptocurrencies, with regulators worldwide warning that investors could lose everything in the Wild West market.
Concern has been growing that unregulated cryptocurrency markets are vulnerable to manipulation by traders. The US Department of Justice recently began criminal investigations into the potential price manipulation of several cryptocurrencies, according to recent media reports.
In the response about whether the unauthorised firms should have sought approval from the FCA, the regulators added:
“If we conclude that they are, then we may investigate and take action, identifying and determining the most serious matters which pose the greatest risk to consumers.”
While the City watchdog does not regulate digital currencies, it does have purview over cryptocurrency derivatives because they are classified as financial instruments. It has also said it will regulate ICOs on a case by case basis, depending on how they are structured.
The UK parliament’s Treasury Committee has also launched an inquiry into digital currencies and the distributed ledger technology underpinning them.
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