The Financial Conduct Authority (FCA), the British financial regulator, is warning people about as many as 111 cryptocurrency companies that are not registered with the FCA.
Since the beginning of this year, the FCA requires all UK crypto companies to register with the FCA and comply with all anti-money laundering (AML), or anti-money laundering laws. The scheme is somewhat similar to what De Nederlandsche Bank (DNB) implemented last year in the Netherlands, although it is less strict.
A large part of the crypto companies in the UK have not yet registered but are still operational. Mark Steward, chief of enforcement at the FCA, issued a warning against these companies on June 22. According to him, these unregulated crypto companies are a threat to consumers, banks and financial institutions.
“We have a number of companies that are clearly doing business in the UK without being registered with us and dealing with anyone: banks, payment services, consumers. This is a very real risk, so we are concerned about that.”
Steward also warns against fear of missing out (FOMO). He makes the well-known old comparison between crypto and the Dutch tulip mania from the Golden Age.
“The reason many are investing now is because they are afraid of missing out on something that could go up. Aside from how fleeting these instruments really are, it has all the signs of tulip mania.”
Earlier this month, it was revealed that 51 crypto companies in the UK may close this year because they do not meet the required standards. Despite the crackdown, the FCA recently reported that the number of British bitcoin (BTC) investors continues to rise rapidly and are more positive than ever.