The Financial Conduct Authority (FCA) of the United Kingdom is investigating cryptocurrency firms. The main intention is to improve their regulatory framework related to virtual currencies and blockchain technology. This is not the first time that the regulatory agency investigates crypto firms.
According to The Telegraph, the financial watchdog is investigating 18 different companies related to crypto transactions. Apparently, the FCA is concerned about the integrity these assets pose to financial markets. The name of these companies has not been unveiled.
The strategic lead at the FCA, Christopher Woolard, said that cryptocurrencies pose potential harm to the United Kingdom. He explained that the Bank of England, the HM Treasury and the FCA will be working in order to encourage beneficial innovation and eliminate those harmful actors from the market.
On the matter, he commented:
“We will work with the Bank of England and the Treasury as part of a task force to develop thinking and publish a Discussion Paper later this year outlining our policy thinking on cryptocurrencies.”
This decision comes after a year in which virtual currencies experienced hacks and have been involving in fraudulent activities. At the beginning of 2018, the Coincheck exchange was hacked for $500 million.
At the same time, some Initial Coin Offerings (ICOs) have been performing illegal activities such as scams or pyramid schemes. This has also affected the overall industry. Regulatory agencies are starting to shut down crypto companies while others are starting to follow the crypto market very closely.
For example, in the United States, the Securities and Exchange Commission (SEC), has announced enforcement actions against two Initial Coin Offerings back in November. The regulatory agency considered that they were selling illegal securities and they will have to give investors’ their money back. Furthermore, they also had to pay a fine of $250,000.