UK watchdog was pressured to open doors for crypto firms, ex-chief claims

The UK’s financial regulator allegedly faced political pressure to allow cryptocurrency firms entry into the market.

Charles Randell, who chaired the Financial Conduct Authority (FCA) between 2018 and the spring of 2022, believed the regulator should have been more leery.

At a conference hosted by the Bank of England’s Prudential Regulation Authority, he highlighted crypto firms an example of politicians trying to influence independent regulators, per a Guardian report on Tuesday.

“In the context of crypto, in my experience as FCA chair, was that there was a lot of political pressure to welcome firms, some of which are now under criminal investigation by the US Department of Justice,” he said, without disclosing the name of the companies.

Blockworks has reached out to the FCA for comment.

Since Jan. 2020, the FCA has received 324 applications from crypto firms. Among these, 225 withdrew their applications for reasons undisclosed.

Currently, only 43 firms are registered, including Gemini, Zodia Custody and Zodia Markets, Wintermute, Bitpanda, Galaxy Digital, eToro and Revolut.

Coinbase has received authorization to offer payment services under the name CB Payments, while Binance does not have authorization from the FCA. Both firms are currently facing lawsuits by the US Securities and Exchange Commission.

Randell pointed out that regulators face challenges in preventing undue influence from industry or political interests.

The UK crypto industry is preparing for new regulations to be introduced in the coming year. Andrew Griffith, the economic secretary to the UK Treasury, stated in April that crypto regulations would be finalized in the next 12 months.

Upcoming rules scheduled to take effect next month will mandate that crypto companies ensure their marketing is transparent, equitable and prominently displays risk warnings.

Rishi Sunak, current prime minister of the UK, has displayed a strong interest in cryptocurrencies and blockchain technology. 

He has previously outlined his ambitions to establish the UK as a hub for cryptoasset technology and investments, as well as advocated for the recognition of stablecoins as a legitimate form of payment.

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