The UK Financial Conduct Authority took almost three years to address fraudulent activity in cryptocurrency ATMs nationwide, according to the National Audit Office.
Concerns have been raised by the UK’s National Audit Office (NAO) regarding the Financial Conduct Authority’s (FCA) ability to effectively regulate the cryptocurrency market.
The NAO has stated that the FCA is taking too long to react and take action against illegal activities in the cryptocurrency industry in a recent report titled “Financial services regulation: adapting to change.”
The FCA took nearly three years to take action against unlicensed operators of cryptocurrency ATMs, as the NAO pointed out. According to reports on July 11, the FCA closed 26 cryptocurrency ATMs as part of a coordinated investigation. Meanwhile, according to the NAO:
“While the FCA has required crypto-asset firms to comply with anti-money laundering regulations since January 2020, and began supervision work including engaging with unregistered firms, it did not begin taking enforcement action against illegal operators of crypto ATMs until February 2023.”
The NAO claims that the lack of specialised crypto personnel is what caused the delay in registering crypto firms to apply for regulatory approval from the FCA.
The report stated, “For instance, the FCA took longer than expected to register crypto-asset firms under money laundering regulations due to a lack of crypto skills.” As of January 27, it was reported that, since the regulations went into effect in January 2020, the FCA has only authorised 41 of the 300 applications submitted by cryptocurrency firms seeking regulatory approval.
This follows the FCA’s recent release of guidance materials aimed at assisting cryptocurrency firms in comprehending the recently implemented new regulations regarding crypto promotion.
According to reports, the FCA published “finalised non-handbook guidance” on November 2 to help with compliance with the new rules.
The new regulations particularly address customer promotion policies for cryptocurrency companies.
The FCA listed problems like risk warnings not being visible enough in small fonts and cryptocurrency companies touting how easy it is to use cryptocurrency without emphasising the risks.