FCA’s New Chair Claims Crypto Firms are “Deliberately Evasive,” Wants More Regulation
Ashley Alder, the incoming chair of the United Kingdom’s Financial Conduct Authority, has issued some harsh warnings regarding the crypto ecosystem. Specifically, he claimed that crypto companies are “deliberately evasive” and suggested the sector facilitated money laundering, asking for more regulation. With the recent FTX collapse, regulators worldwide will likely increase their scrutiny over the coming year.
Upcoming FCA Chair Asks for More Crypto Regulations
Alder, who will become FCA chair in February, told UK Treasury members on Wednesday that many crypto platforms are “deliberately evasive,” facilitate money laundering and create “massively untoward risk,” according to a report from Financial Times. He said:
“Our experience to date of [crypto] platforms, whether FTX or others, is that they are deliberately evasive, they are a method by which money laundering happens in size.”
The current chief executive of Hong Kong’s Securities & Futures Commission added that crypto firms “bundle a whole set of activities which are normally segregated,” giving rise to unexpected risks such as potential conflicts of interest. “I think it [crypto] should be regulated further,” he said.
The FCA is the conduct regulator for around 50,000 financial services firms and financial markets in the UK. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.
Alder’s comments and the fact that the FCA will assume new powers to regulate the crypto sector could suggest that crypto businesses in the UK might face a severe battle. In early December, the UK’s Treasury proposed a package that would give more powers to the FCA to regulate crypto.
The new powers will provide for the FCA to oversee crypto more broadly, including monitoring how companies operate and advertise their products, restricting companies selling from abroad into the U.K. market, and more.
Join our Telegram group and never miss a breaking digital asset story.
UK’s Aspiration to Become a Global Crypto Hub
New UK Prime Minister Rishi Sunak, who took office on October 25, has been a vocal crypto supporter, aspiring to make the UK a global crypto hub. Back in April, speaking about proposed regulatory reform related to stablecoins when has chancellor of the exchequer, Sunak said:
“It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.”
However, as the crypto industry became embroiled in crisis after crisis over the past couple of months, the fate of those dreams remains unclear. As reported, FTX filed for Chapter 11 bankruptcy after failing to secure emergency funding in early November.
Sam Bankman-Fried, the disgraced founder and former CEO of the exchange, was arrested by the government of The Bahamas on Monday after US prosecutors formally filed criminal charges against him.
The Southern District of New York has indicted SBF on eight criminal charges, including wire fraud and conspiracy by misusing customer funds. Separately, the Securities and Exchange Commission has charged SBF with “orchestrating a scheme to defraud equity investors in FTX.”
Nevertheless, Andrew Griffith, recently appointed Economic Secretary to the Treasury, insisted last week that those ambitions were unchanged despite recent calamities. “Yes, there are questions about the future of crypto — but we’d be foolish to ignore the potential of the underlying technology,” he reportedly told an event in Edinburgh.
Do you think the UK would be able to become a global crypto hub? Let us know in the comments below.