Katharine Wooller, Business Unit Director at Coincover, believes that the FCA’s actions are a positive and encouraging step. She acknowledges that the UK’s regulation efforts have been slow in the past and sees increased proactivity in protecting users as a positive development.
“Trust in cryptocurrencies has once again been shattered following the FTX scandal. The continuous threats of theft, hacking, and fraud have contributed to consumer anxieties and skepticism towards the entire market. The unfortunate reality is that digital assets remain vulnerable to abuse from a small number of bad actors, highlighting the need for safeguards and proper governance standards.
Without regulation, the market will continue to be like the Wild West, with abnormally high levels of risk. However, if implemented correctly, regulation can minimize these risks and protect investors. Additionally, it can prevent failures and corruption that create instability in the market, ultimately establishing the trust and security necessary for the growth of cryptocurrencies.”
The FCA, known as the United Kingdom’s financial watchdog, has received attention due to its conservative and highly stringent approach to approving crypto businesses. This is despite the government’s plans to transform the UK into a thriving crypto hub.
A little under a year ago, Chancellor of the Exchequer Rishi Sunak stated:
“It is my ambition to position the UK as a global hub for cryptoasset technology, and the measures outlined today will support firms in investing, innovating, and expanding within this country.”
So far, the FCA has granted regulatory approval to only 41 out of 300 crypto firm applications seeking approval to date.