The United Kingdom’s FCA is looking for crypto experts as part of their latest efforts to regulate digital currencies operating in the UK.
The UK’s financial conduct authority posted a job role on LinkedIn, calling for someone with “experience working with crypto assets” and other relevant financial experience to help the organization expedite its aims of bringing more supervision and regulatory oversight to the cryptocurrency industry.
FCA and its Punishing Oversight
The FCA (financial conduct authority), is a governmental body responsible for fair, lawful conduct in financial activity, and became the UK’s official legal authority and supervisor in matters of crypto behavior on January 10, 2020.
As part of the body’s role, it is responsible for bringing Anti-Money Laundering and Counter-Terrorism Finance Policy into action.
To date, British policy reflects a stringent version of the EU’s fifth Anti-Money Laundering Directive, bringing in a more invasive approach to crypto regulation.
The EU directive advises regulating companies that are directly involved with the transfer of fiat currency into crypto, whereas British law – closely in line with FATF – recommends deeper oversight of all ‘virtual digital asset service providers’ or ‘crypto exchange providers’.
According to Paul Hastings LLP, the FCA’s brief includes monitoring UK entities that facilitate:
- Exchanging, or arranging or making arrangements with a view to the exchange of, crypto-assets for money (i.e., Pounds Sterling or any other currency or money in any other medium of exchange) or money for crypto-assets;
- Exchanging, or arranging or making arrangements with a view to the exchange of, one crypto-asset for another; or
- Operating a machine, which utilizes automated processes to exchange crypto-assets for money or money for crypto-assets.
As part of their efforts, the FCA demands that these businesses register with the FCA. After registration, they are given a “fit and proper” test, where their involvement with illegal activities is determined.
The difficulty with this wide-spanning objective is that it likely creates an immensely broad jurisdiction for the FCA — covering many complex elements of the crypto industry, which explains why they’re looking for more man-power for their regulatory campaign.
Effect On Crypto Companies And Cryptocurrency Owners
As part of their efforts, the FCA is encroaching on the pseudo-anonymity of many cryptocurrencies such as Bitcoin as well as the privacy element of many altcoins, such as Monero.
One of the compliance orders in their supervisory guidelines stipulates that crypto businesses must:
“Undertake ongoing monitoring of all customers to ensure that transactions are consistent with the business’ knowledge of the customer, the customer’s business and risk profile.”
For some UK exchanges, where privacy and anonymity is their selling point — the growing regulation is a crushing blow. The crypto wallet provider Bottle Pay, for example, decided to terminate in response to demands to reveal their customers’ information.
However, not all business models, such as those which connect buyers and sellers without facilitating an exchange will be affected by growing regulation.
According to the co-founder of AgoraDesk.com, a business that provides a forum where private Bitcoin and other cryptocurrency buyers and sellers post their bids and offers in a peer-to-peer manner, “these types of regulation don’t affect a business with our kind of structure because we never match transactions and the traders settle the transactions themselves.”
What are your thoughts on governments regulating crypto? Share your thoughts in the comments section below!
Image via Bitcoinist Media Library
