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LONDON (Reuters) – The UK market watchdog said on Tuesday more than 100 unregistered crypto asset companies pose a risk to the wider financial system and warned consumers, banks and corporations payment services not to process them.
Mark Steward, head of enforcement and market oversight at the Financial Conduct Authority (FCA), told the City & Financials City Week event that these companies are high risk, volatile and unregulated – and 111 are operating in Great Britain without registration required.
We have a number of companies that are clearly doing business in the UK without being registered with us and dealing with someone: banks, a payment services company, consumers, he said. . It is a very real risk so we are concerned about it.
Since January, when the FCA was appointed anti-money laundering and terrorist financing supervisor of crypto asset companies, these companies must obtain full registration with the FCA before they can start trading. .
But only a handful of them had financial crime risk, Steward said.
Nearly 2.5 million UK adults now own crypto assets, a sharp increase in the past year as people – locked inside by the COVID-19 pandemic – are spending more time online and are motivated by the fear of missing a boom.
Steward said many new investors – who tended to be men over 35, funded by credit and less knowledgeable than 18 months ago – were at risk of falling prey to tulipomania, the infamous 17th century Dutch bulb trade frenzy.
The reason many are investing now is because they are afraid of missing out on what could be a boom, he said. Aside from the volatility of these instruments, there is the mania of tulips everywhere.
Reporting by Kirstin Ridley; Editing by Edmund Blair
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