Ashley Alder, the new chair of the Financial Conduct Authority (FCA) in the U.K., has voiced worry that certain cryptocurrency businesses may be “deliberately elusive” and may help with money laundering.
According to a Financial Times story, Alder informed U.K. Treasury members during a virtual conference on Wednesday that many crypto sites produce “massively unwarranted risk.”
Alder, who presently heads the Securities & Futures Commission in Hong Kong, is anticipated to take the helm of the FCA in February. His most recent remarks imply that cryptocurrency businesses looking to establish operations in the U.K. would have a difficult road.
According to reports, he stated that “[crypto] should be further controlled” and added, “Our experience to date with [crypto] platforms, whether FTX or others, is that they are purposely elusive; they are a technique by which money laundering happens in bulk.”
To safeguard customers, maintain industry stability, and foster healthy competition amongst financial service providers, the FCA, a financial regulatory organisation in the United Kingdom, oversees the financial services sector.
The watchdog has always had a negative attitude toward cryptocurrency enterprises, rejecting 80% of those who applied to be listed on its roster of organisations that have completed its anti-money laundering examinations.
While this is happening, the British government is finalising plans to give the watchdog additional authority to control the cryptocurrency markets. These proposals include sharing the watchdog more control over crypto businesses’ management, management practices, and advertising, as well as more.
The action was taken in response to FTX’s historic failure, which occurred in early November and cost retail customers billions of dollars in damages. FTX was previously the third-largest cryptocurrency exchange.
The Bahamas’ government detained Sam Bankman-Fried on Monday after U.S. prosecutors formally filed criminal charges against the discredited exchange’s founder.
SBF has been charged with several crimes by the SEC, the Department of Justice, and the Southern District of New York.
A bipartisan measure to close money laundering loopholes in the cryptocurrency business has been introduced by Republican Senator Roger Marshall of Kansas and Democratic Senator Elizabeth Warren, as previously reported.
Separately, to properly govern the asset class, the G20 nations intend to develop a consensus on cryptocurrency policy.
According to Alder, the bitcoin industry “bundles a whole set of operations which are generally compartmentalised,” creating “massively adverse risk.”
The remarks made by the new FCA head appear to conflict with the regulatory body’s initiatives to create a supportive environment for the bitcoin business in the United Kingdom.
Earlier this year, the organisation informed Cointelegraph that most of their monitoring consisted of licensing regional bitcoin exchanges for Anti-Money Laundering (AML) purposes. The FCA’s registered crypto asset roster presently lists 41 deals.
The U.K. Treasury is currently working to develop new regulatory guidelines for the cryptocurrency market, which may include restrictions on the volume of foreign firms’ imports. The fall of FTX in November has had a significant role in this.
The proposed regulatory amendments also include giving the FCA responsibility for overseeing the operations and marketing of bitcoin enterprises.