Governments around the world have become proactive in regulating the crypto space. The back-to-back collapses of crypto firms this year have, undoubtedly, made the space very unstable. With customers losing billions, regulators have voluntarily been stepping in. For instance, crypto regulations in Australia will likely amplify in 2023.
Read More – Australia: Crypto Regulations To Amplify In 2023
Now, it seems like the UK might follow suit. A recent Financial Times report brought to light that Ashley Alder, the incoming Chair of the Financial Conduct Authority, pointed out that crypto firms hoping to build businesses in the UK will face a mounting battle when the agency assumes new powers to regulate the sector.
He said,
“I think it [crypto] should be regulated further.”
Also Read: Is UK’s New Prime Minister Pro-Crypto?
Crypto Firms Facilitate Money Laundering
Speaking at a cross-party Treasury Select Committee, Alder pointed out that in his experience, crypto platforms were “deliberately evasive,” fostered money laundering at scale, and created “massively untoward risk.”
Alder, who is currently the Chief Executive of Hong Kong’s Securities & Futures Commission elaborated,
“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.”
He added that the way firms from the space “bundle a whole set of activities which are normally segregated… gives rise to massively untoward risk” including potential conflicts of interest and assets not being properly sorted out.
The FCA, on its part, has struggled with its existing workload. For now, it is midway through a transformation plan. When asked by MPs about how only less than a third had confidence in the FCA’s leadership, Alder said,
“You could only hope that would improve.”
Furthermore, the incoming Chair acknowledged that the FCA suffered from a perception that it had failed to “secure adequate protection for consumers” and “perennial questions around operational efficiency”. Alder said he was planning to move to the UK in January. Notably, he will become the FCA Chair the following month.
Worth recalling here is that the UK has said that it will expand tax benefits for investment managers to include crypto investments. Prime Minister Rishi Sunak said that he wants the U.K. to be a global crypto hub. The Treasury announced that it would extend its existing tax relief to the crypto industry.
Read More: UK to give tax breaks for investment managers to include Crypto
The FCA, however, declined to comment on whether or not its incoming Chair’s views were in conflict with the government’s.
Also Read: UK Finalizes Plan for Crypto Regulation