Approximately 85% of crypto firms do not meet the lowest levels of compliance, the UK’s financial regulator has revealed.
The data was published in a conversation between the Financial Conduct Authority (FCA) and the Treasury Committee, revealing that the overwhelming majority of crypto businesses fell short of complying with the financial regulator’s anti-money laundering and counter-terrorist financing regime.
“We are in the middle of an inquiry into crypto regulation and these statistics have not disabused us of the impression that parts of this industry are a ‘Wild West’,” said Harriett Baldwin MP, chair of the Treasury Committee.
Out of all crypto compliance applications, 73% were withdrawn or failed. The FCA has previously said that crypto company FTX was not authorised in the UK before it went bankrupt.
A lack of “knowledge, skills and experience” from those working in crypto and an inability to manage risks was also highlighted by the FCA.
The regulator also found connections to financial and organised crime as part of its probe, which were reported to law enforcement.
Crypto is not yet regulated by the FCA. However, those looking to operate in the space must register to operate in the country.
This week saw ex-chancellor Philip Hammond become the chair of the London crypto unicorn Copper.