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The UK regulators have been among those that have taken a more active stance when it comes to taking care of crypto regulations, and so far, they have been rather strict due to a number of concerns. The FCA continues to say that creating a proper regulators regime for the decentralized world will take careful thought, and that will have to include all aspects of it, including the FCA’s latest focus — crypto promotions.
UK regulators might take over crypto promotions
The crypto industry is known for its promises, some of which are realistic, while others might not be as possible as the promoters claim they are. This has caused Britain’s finance ministry to start questioning whether this aspect of the industry should be the next one to take control over.
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The FCA Chair, Charles Randell, addressed these thoughts and concerns, stating that there are no assets or real-world cashflows that are underpinning the price of speculative digital tokens. This is true for all speculative tokens and coins, even the best-known assets, such as Bitcoin. He further noted that most cryptocurrencies cannot even boast a scarcity value, and there is no way of knowing how their story will end. He does believe that that end might not be a good one, which wouldn’t be surprising for speculative assets.
Speaking of crypto promotions, specifically, he said that there are two cases where regulators should have powers to take action, with taking control over crypto promotions being one of them. According to Randell, this would significantly reduce the harm that the promotions are causing. The second case is taking control for the purpose of stopping contagion at authorized firms from unregulated activities in digital tokens.
This was specifically mentioned due to the recent incident with Binance, where the regulators ordered it to stop its activities in the country, as it lacked the necessary licenses to conduct them. After studying the exchange, the regulator said that it cannot be supervised properly, even though the exchange claims to be in full compliance.
Randell said that businesses that cannot be bothered to explain basic issues will not receive FCA registration or authorisation, especially in cases such as the one regarding Binance, where the regulators don’t even know who is responsible for key functions or how they are organized.