Gairika Mitra
The Financial Conduct Authority (FCA) of the UK has defended its rigorous approach to cryptocurrency regulation, emphasizing that its strict standards are crucial for preventing money laundering and other criminal activities.
Critics have suggested that the FCA’s tough stance could stifle innovation, but the agency remains committed to ensuring the safety, security, and integrity of the UK’s financial system.
As per the FCA, it wants to maintain high standards in terms of crypto regulations and aims to safeguard not only consumers but also the integrity of the UK’s financial markets.
It acknowledges that some have expressed concerns about the bar being set too high for registration, with claims that the strict criteria may hinder the UK’s position as a global financial hub. In response, the regulator emphasized that lowering standards would not foster a safe and thriving industry but could instead create a system built on unstable foundations, vulnerable to collapse.
Why The Need for Strict Crypto Regulations?
The FCA is particularly focused on the Money Laundering Regulations (MLRs), which require firms to implement robust controls to prevent financial crimes. According to the agency, relaxing these standards would open the door for illicit funds to flow freely, potentially causing widespread harm. Criminal activities such as terrorism, organized crime, and sanctions evasion are some of the real-world threats the FCA aims to mitigate by enforcing these measures.
Allowing unchecked innovation at the expense of consumer protection would be a dangerous mistake, the FCA argued. Instead, the regulator seeks to develop a well-regulated and trusted crypto sector by collaborating closely with industry stakeholders, government agencies, and international partners.
Supporting a Healthy Crypto Industry
While the FCA’s primary goal is to protect consumers and prevent financial crime, it is also committed to fostering a sustainable and competitive crypto sector in the UK, it said. To this end, the FCA provides extensive support to firms throughout the registration process. The agency encourages companies to engage early and offers guidance, pre-application meetings, and practical examples to help them navigate the regulatory landscape.
Each crypto firm’s registration is assessed on a case-by-case basis, with the FCA considering not only the firm’s systems and controls but also the environment in which it operates, the people behind the business, and its target customers. Given these individualized assessments, the length of the registration process can vary.
The FCA acknowledges that the crypto industry is still evolving, and regulatory challenges are inevitable as firms adapt to new processes. However, it stresses that it remains open to working with firms to help them meet the necessary standards. The focus, the FCA asserts, is on building a stable and trusted industry, not on stifling innovation.
A recent report states that Bitcoin is by far the most popular crypto form in the UK, followed by Ethereum.
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Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
