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In its recent article, Reuters has reported that British financial regulator FCA states the regulation of cryptocurrency assets will “take careful thought”.
The chairman of FCA, Charles Randell stated that regulatory agencies need powers to prevent potential harm from promotions of crypto assets and now FCA has an idea on how to do this in the UK.
“No real world cashflows underpin Bitcoin or other crypto”
Chair of the FCA Randell has stated that no assets or any actual cashflows underpin Bitcoin and other “speculative digital tokens” in reality. Many of them even fail to show a scarcity value.
He referred to cryptocurrencies as “new speculation”, assuming that their story is not going to end well, as a story of any other new speculative assets.
Therefore, he added, regulators need to be granted powers to bring down the amount of damage that can be made by promotion of crypto assets and to be able to stop “contagion” of unlicensed firms from conducting unregulated activities with crypto tokens.
FCA'S RANDELL SAYS REGULATORS SHOULD HAVE POWERS TO STOP POTENTIAL HARM FROM CRYPTOASSET PROMOTIONS
— *Walter Bloomberg (@DeItaone) September 6, 2021
FCA'S RANDELL SAYS FCA WILL NOT AUTHORISE A FIRM THAT REFUSES TO EXPLAIN BASIC ISSUES SUCH AS HOW THEY ARE ORGANISED
Preventing potential damage from crypto promotions
The FCA has already banned Binance from operating legally in the UK, stating that they are unable to supervise this crypto monster properly, putting forward several requirements for Binance. Now the exchange says it is fully compliant with these requirements of the British regulator.
However, Binance has been facing regulatory issues in multiple countries now, including several ones on Europe, Asia and Africa. The latest country has been Singapore and Binance has stopped offering trades with the local fiat currency amidst the regulatory scrutiny.
Randell has stated that the FCA will not grant registration or authorization to any new business, including crypto companies, if they are unable or unwilling to explain the basics of the work – like, who are responsible for their key functions, basics of how they are organized, etc. He added:
"That would be token regulation in the worst sense."
Last year, the FCA announced that it had banned companies from selling derivatives based on BTC, ETH and other crypto assets to retail consumers.