U.K. financial watchdog urges political support for crypto bans

Crypto exchanges like leader Binance, and FTX, cannot operate in Britain as they don't have FCA approval for their anti-money laundering controls

Updated - November 16, 2022 11:11 am IST

Published - November 16, 2022 09:49 am IST - LONDON

File photo of the FTX logo

File photo of the FTX logo | Photo Credit: Reuters

Britain's Financial Conduct Authority (FCA) on Tuesday called on lawmakers to show their support for its unpopular decision not to grant licences to scores of crypto exchanges like FTX, which has just collapsed.

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The FCA has come under pressure as 85% of licence applications from crypto trading firms have either been rejected or withdrawn, the watchdog's chief executive Nikhil Rathi said.

Crypto exchanges like leader Binance, and FTX, cannot operate in Britain as they don't have FCA approval for their anti-money laundering controls.

The FCA is set to have a new objective of keeping Britain a globally competitive financial centre, piling pressure on the watchdog to keep its doors open.

"We have taken quite a bit of heat from people saying we are allowing this innovative activity to move to other jurisdictions, and that other jurisdictions are stealing a march," FCA chief executive Nikhil Rathi told a committee in parliament's upper chamber, the House of Lords.

“That means sometimes turning down some of the largest players in the global market,” he added.

FTX obtained a now suspended licence from the Cyprus regulator. Binance has obtained approval from some EU member state regulators.

Rathi said he stood by decisions to ban such platforms.

"That does require, I think, to have parliamentary support and political support when we take some of those robust decisions," he said.

There are no consumer protections for crypto investments, and the FCA has no information on how much money UK consumers have put into crypto asset platforms operated overseas.

"If they want to they can go all around the world and deposit money by credit card that we don't track, and we have no means of tracking it," Rathi said.

Crypto assets are unregulated in Britain, but a new financial services and markets bill now being approved by parliament is expected to bring marketing of crypto assets under the regulatory net, giving the FCA powers to protect consumers.

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