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The UK’s National Audit stated that the Financial Conduct Authority (FCA) has all the rights to control virtual assets but takes years to take enforcement actions against crypto companies breaking the AML compliance laws.
According to the UK’s National Audit Organisation (NAO), the FCA has the power to act against non-compliant crypto firms to combat illicit activities. However, the country’s financial regulatory department is slow to register crypto firms and act against crypto scammers. The National Audit emphasised that the FCA has been regulating virtual asset service providers for years, and till now, it has been slow. The US is taking action against crypto business leaders like FTX, the UK’s financial department, compared to not taking any action against bad actors in crypto. The NAO stated in the report, “even when an issue falls inside the FCA’s perimeter, or it has the power to act, it can take years for the FCA to implement any enforcement action.”
The NAO claimed in the report that FCA was legalised to take action against the crypto firms and register virtual asset service providers in 2020. Nevertheless, it has not taken action against the illicit crypto firms until 2023. Although it started taking action and engaging unregistered crypto businesses after that, it is still working slowly. NAO stated, “the FCA reported publicly that it saw a significant drop of 68% in reported crypto ATM activities in 2022, although not all of this could be attributed to FCA activity.”
Crypto firms constantly accused the financial agency of slow registration and time-consuming business verification. The NAO blames all this on their staff and their poor retention. They also urge the regulatory department to utilize robust technology in their compliance system. This will streamline crypto registration and bolster security to prevent financial crimes. According to the report, “The FCA has found recruitment and retention of staff with crypto compliance skills is difficult due to competition between employers for people with these skills.” Furthermore, the report revealed the FCA only dealt with 14.000 unregulated crypto cases in three years from 2020 to 2023.