LONDON, United Kingdom – The cryptocurrency industry earns its place as one of the most trending payment schemes, wherein it has been stealing the spotlight. However, part of its fame is being called “fraud magnet.”
The Financial Times reports that the Financial Conduct Authority or FCA investigated 87 firms that are involved in cryptocurrency. There was a 74% rise in the total of investigations, which were transferred in the segment in the year 2018.
The FCA issued a consultation paper on November 1 to emphasize the message that the controller is keen to take a hard-hitting line. This paper suggested a prerequisite for crypto asset trades to apply with it by January 10, 2020. Moreover, the business accountable to be affected by such suggestions includes wallet providers and cryptocurrency trade providers. Also, it includes companies anticipating preliminary coin assistance.
Ruja Ignatova, the founder of OneCoin, was the person behind the act in 2017. She was exposed to a famous BBC podcast succession entitled “The Missing Crypto Queen” due to a Ponzi system fraud.
Aside from the Ignatova incident, there were around 1,800 rip-offs in the cryptocurrency sector in recent year as per FCA. This organization proposed a ban on derivatives, wherein the main reason was that commercial products of undiscernible worth were advertised to naïve depositors.
According to other reports, $4.26 billion of digital assets was taken globally in 2019’s first two quarters.
Also, it was reported that when the founder of QuadrigaCX died unpredictably, he didn’t leave any record of his password to the device that stored around $190 million. Hence, their clients’ money was held.
QuadrigaCX is a renowned cryptocurrency in Canada.
These occurrences set the proposal for the FCA guideline of cryptocurrency businesses that was upheld by the United Kingdom government paper. It emphasized evidence of increased risks from crypto asset utilization for illegal activity and the threats to markets and clients.
Due to the outcome of all the cryptocurrency scandals, this sector became related to commercial practice. However, it also became a crime. It’s in contrast with the vision of the founder of cryptocurrency, which is Satoshi Nakamoto.
Nakamoto aims to prevent the oversight of alleged governments and institutions. Conversely, cryptocurrency because of a freedom victim. On the other hand, it found assistance from law and ruling sources.
Despite the happenings, the UK government remains positive, having the yearning to clean up the mess, as well as sue clients who get involved in the crime. Once the bad things were removed, and the lawful status of cryptocurrency is clarified, legit operators will appreciate more opportunities that’ll provide more confidence to investors.