Investigations by the City watchdog into cryptocurrencies have climbed sharply in the last year amid a growing effort to tackle fraud in the sector.
The Financial Conduct Authority (FCA)’s number of live probes into cryptocurrency businesses jumped 74 per cent to 87 in the last 12 months.
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According to David Heffron, a partner at Pinsent Masons, the rise in investigations reflects the FCA’s “increasingly hand on and no-nonsense approach to enforcing the law in the cryptocurrency market.”
FCA boss Andrew Bailey has warned Bitcoin buyers that they should be ready to “lose all their money”, publicly declaring that it was similar to gambling and was not a secure investment.
Heffron added: “For cryptocurrency businesses acting lawfully these statistics will be encouraging – they want bad actors pushed out. The FCA’s crackdown on businesses operating on its regulatory perimeter will instil a degree of confidence that products reaching consumers are less likely to be scams.”
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Pinsent Masons said that following the publication of its final guidance on crypto-assets in July 2019, the FCA is now clear on those businesses that fall within its remit and can therefore more accurately pinpoint cases for investigation.