Charles Randell, the chair of U.K. regulator the Financial Conduct Authority (FCA), said crypto firms issuing digital tokens need to brought “firmly within our reach.”
- Randell made his comments in speech to the Cambridge International Symposium on Economic Crime. A draft of the speech was published on the FCA website.
- In the talk, he discussed the threat that token issuers may pose to vulnerable people by promoting speculative investments.
- He also suggested, however, that greater regulatory oversight might be harmful, creating a “halo effect,” whereby unrealistic expectations are raised around consumer protection.
- “One thing is clear: because of the decentralized way that these speculative tokens are created, any effective system of regulation would require a business seeking registration or authorization with the FCA to bring itself firmly within our reach, with people and resources that we could access in order to supervise and enforce our requirements,” Randell said, according to the draft.
- FCA registration would not be granted to companies that are unable to explain basic issues related to business structure and governance. Those concerns were recently aired regarding the world’s largest crypto exchange, Binance. In a supervisory notice dated June 25, the FCA concluded that Binance was “not capable of being effectively supervised.”
- One of the FCA’s main areas of concern for the crypto market should be that of promotions, according to Randell.
- “It’s absolutely imperative that any regulation of cryptoasset promotions requires the risks to be clearly highlighted and does not give the impression that the token itself is subject to regulatory supervision or has regulatory approval.”