The head of the U.K.’s FCA, in a speech, said that crypto promotions require more oversight and that the agency needs more power to ensure investor protection.
The United Kingdom’s Financial Conduct Authority head has issued a statement, calling for stricter regulations on platforms that promote crypto. The FCA’s head, Charles Randell, spoke at the Cambridge International Symposium on Economic Crime and said that regulators have to be given more power to ensure investor protection. This is in line with what U.S. SEC Chairman Gary Gensler has said.
The warning is primarily targeted at potential scams and pump and dump schemes, which still plague the market. He also said that more rules are necessary for digital ads and influencers, who do indeed have some hold on the market.
The speech also saw Randell lay out three key issues that need to be tackled, which are:
- Make it harder for cryptocurrencies to be used for financial crime
- To support useful innovation
- “The extent to which consumers should be free to buy unregulated, purely speculative tokens and to take the responsibility for their decisions to do so.”
Randell’s speech indicates that the FCA does not intend to impose draconian laws on the crypto market. Rather, it wants to encourage innovation, so it only means tackling crime and investor protection standards. This seems to be the stance that most countries are taking.
The FCA gave the public a warning about Binance earlier this year, reminding them that the exchange was not licensed. Binance responded to this, saying that it had done nothing wrong and would pursue compliance standards.
FCA warns of crypto assets pushed by stars
Randell also warned potential investors over funding assets that are promoted by celebrities. In the warning, it pointed out a recent Instagram post from Kim Kardashian-West promoting Ethereum Max. Saying that it “may have been the financial promotion with the single biggest audience reach in history,” the FCA head used Kardashian-West’s Ethereum Max post to highlight the concerns.
While he does not completely dismiss crypto, he exercises caution when it comes to gauging the value of digital assets. For that reason, he says that influencers and ads must be supervised more strongly, as millions of people could be pulled into a scam.
Randell also acknowledges the difficulty of regulating crypto and whether it might provide a “’halo effect’ that raises unrealistic expectations of consumer protection.” In any case, it appears that the U.K. is gearing up for regulation, which could have an impact on the market.