UK regulator FCA says crypto exchanges contribute to money laundering

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Over the past few weeks, regulators around the world have denounced Bitcoin and cryptocurrency in general, and their outlandish denunciations are becoming increasingly outrageous.

The Financial Times revealed on Thursday that Ashley Alder, who is expected to oversee the UK’s Financial Conduct Authority, is the latest to make one of these absurd claims.

On December 14, the new FCA chief issued a scathing critique of the cryptocurrency industry, telling lawmakers that digital currency platforms “facilitate large-scale money laundering” and “deliberately” protect their acts of inspection.

Cryptocurrency markets are back in red as another week draws to a close. With so much negativity emanating from the crypto space – bankruptcies, scams and illicit money movements – it’s no wonder the UK financial regulator is starting to tighten the noose on regulation.

Alder, who is currently a director of the Hong Kong Securities and Futures Commission, drew particular attention to crypto exchange FTX, which filed for bankruptcy last month following an influx of customer withdrawals that precipitated his unexpected disappearance.

Former CEO Sam Bankman-Fried is currently being held in the Bahamas after authorities denied him bail.

Image: Insurance Insider Crypto mass exodus due to FCA Whip

The FCA has been extremely rigid with its business permits, refusing 80% of companies seeking to set up in the UK. This has caused a migration of tech companies to more accommodating governments in Europe, the Times said.

Ader said:

“To date, our experience with crypto platforms, whether FTX or otherwise, has shown that they are deliberately evasive, they are a method by which money laundering occurs in size.

The FCA, which has struggled to cope with its day-to-day task, is in the midst of a reform program which chief executive Nikhil Rathi said would improve efficiency.

FCA’s new chief, Ashley Alder. Image: Anthony Kwan/Bloomberg

Alder said digital currency must be appropriately supervised to reduce risks associated with conflicts of interest and ambiguous classification of crypto assets.

Upon taking office in February 2023, the new head of the FCA stressed that companies seeking to conduct operations in the UK will be subject to tough rules.

Over the past six years, the European Union Agency for Criminal Justice Cooperation has reported nearly 3,000 cases of transnational money laundering.

Alder’s unfavorable stance towards digital currency coincides with the UK’s push to become a global crypto hotspot.

Total Crypto Market Cap At $786 Billion | Chart: TradingView.com The Clandestine Movement of Dirty Money

Recently, Prime Minister Rishi Sunak revealed plans to provide tax relief to crypto investment managers.

At the same time, the global scale of money laundering is difficult to quantify due to its covert aspect, although it is believed to be substantial.

The United Nations Office on Drugs and Crime estimates that up to 5% of the world’s gross domestic product, or up to €1.87 trillion, is laundered each year.

Data from Chainalysis indicates that approximately 0.05% of all crypto transactions in 2021 were related to money laundering.

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