The UK’s financial regulator has increased its dedicated crypto team to 100 employees as it addresses new regulatory challenges in the digital asset market, according to Financial News. This expansion, reported through a Freedom of Information Act request, sees these staff members spread across six specialized teams focused on the sector.
Since 2020, the Financial Conduct Authority (FCA) has been responsible for overseeing anti-money laundering and counter-terrorist financing measures within the UK crypto industry. Its role has expanded significantly, now requiring crypto firms offering exchange services or custody wallets to be registered with the FCA. Recent legislative updates have also extended its oversight to include crypto financial promotions.
Additionally, the government is moving towards granting the FCA full authority to regulate cryptoassets throughout the UK.
UK Watchdog Expands Team for Crypto Licensing, Policy
According to the outlet, most of the FCA’s crypto personnel are primarily engaged in approving licenses for firms and overseeing their activities post-approval. However, the largest increase in staffing within the division occurred in its policy department last year. This underscores the ongoing collaboration between the FCA and the government as they strive to develop more comprehensive crypto regulations for the UK.
The FCA has indicated that its staff members may also participate in crypto initiatives alongside other sectors within teams that have broader mandates. Furthermore, the FCA is proactively preparing for forthcoming regulations, particularly in areas concerning stablecoins.
A spokesperson from the FCA informed that the agency’s focus includes ensuring that crypto companies are adequately safeguarded against financial crimes, supporting innovative crypto enterprises through its Innovation Hub, and collaborating with both governmental bodies and industry stakeholders to formulate the future regulatory framework for cryptoassets.
“Our increased staffing levels demonstrate our commitment to these priorities,” the spokesperson emphasized.
FCA Remains Cautious
In 2023, the FCA allocated substantial resources to oversee crypto activities, assigning nearly a third of its financial crime specialists to monitor crypto businesses. Their rigorous scrutiny revealed deficiencies in anti-money laundering measures across numerous firms, resulting in a significant number of applications being withdrawn, rejected, or denied.
Simultaneously, despite the increasing demand for crypto exchange-traded products (ETPs), the FCA has adopted a cautious stance. Currently, it restricts access to these ETPs exclusively to professional investors, stipulating that they must be traded on recognized exchanges and prohibiting retail participation.
