The Financial Conduct Authority (FCA), the regulatory agency responsible for overseeing the UK financial industry, has dramatically increased its scrutiny of cryptocurrency-related businesses over the last year, the Financial Times reports.
According to information provided to FT, the Authority is currently investigating 87 cryptocurrency-related firms, a 74 percent increase from 2018’s numbers. Those numbers include full-scale ongoing investigations as well as cases that are in the early stages. Regulators estimate that UK customers have lost at least £27 million to illicit cryptocurrency and foreign-exchange schemes.
The FCA has been increasing scrutiny as part of an effort to protect investors from get-rich-quick schemes tied to bitcoin’s 2019 price surge. Such schemes are notoriously simple to set up using social media, since much of the cryptocurrency industry operates in an unregulated environment. Many of those social media scams rely on fake celebrity endorsements to attract investment from unwary consumers.
Pinsent Masons partner David Heffron told the Financial Times that the increased number of investigations is evidence of just how serious the FCA is when it comes to cryptocurrency-related scams. He also suggested that the news would be welcomed by industry players:
“For cryptocurrency businesses acting lawfully these statistics will be encouraging — they want bad actors pushed out.”