This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our privacy statement for more information on the cookies we use and how to delete or block them.

FCA to regulate cryptoassets: Government moves to “fix hole in regulatory wall” say experts

20 July 2020

The Treasury this morning published a consultation paper proposing to expand the FCA’s regulation of cryptoasset investments. The expanded ‘regulatory perimeter’ would allow the FCA to penalise promoters who mislead retail investors about the risks of investment in cryptocurrencies.

Matt Hopkins, Head of Fintech in the Financial Services team at the accountancy and business advisory firm, BDO LLP, comments:

“The Treasury is now moving to fix what has been a big hole in the regulatory wall. Considering how mainstream crypto investment has now become, there is a very real need to protect retail investors.

“Expanding the perimeter addresses the mismatch of risk to market integrity. The unregulated nature of many of these cryptoasset activities has felt anachronistic to the activities and market size for some time.

“As the market expands cryptoassets pose a threat to customers, market integrity and financial crime – it is right that the identified activities are inside the perimeter. The volume and price volatility of cryptoassets makes regulation of the sector particularly urgent.

“Huge amounts of consumer money now flows into cryptocurrencies, often advertised on social media and almost entirely out of the reach of the FCA. Regulation will make it much more difficult for crypto businesses to access investors who may not understand the risks they are taking.

“While the regulator must make sure not to stifle innovation in a fast-growing market, some may argue that enough retail money has been lost in unsuitable crypto investments already and the FCA should be allowed to close this loophole.”

ENDS

About BDO

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 

BDO LLP

BDO LLP operates in 17 locations across the UK, employing 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO International network.

BDO’s global network

The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn. 

Contacts

Frank Shepherd 
PR Manager
Tel: 07812 463601
Email: [email protected]