Several actions of UK authorities pose a threat to the protection of crypto consumers

Amidst the ‘tug of war’ between counties in present situations, crypto space is among the most suffering being treated according to the suitability

During the time of the Russia-Ukraine war recently, cryptocurrency and digital assets like NFTs have again been brought into the limelight. One reason was using crypto assets for donations and crowdsourcing the funds for Ukraine to help in the ongoing crisis. At the same time, another was concerned about crypto being used by Russia in order to bypass the punitive sanctions that Western and European countries have put on the country.

Following such instances, western governments like the US, UK, and other member states of the European Union have tightened the rules while trying to ensure that crypto would not act as a weak spot to perform any illicit activity. On the other hand, the country facing the sanctions and devaluation of its native currency on an international level has recognized the potential and scope of crypto. The authorities announced that the further payments for oil and gas would be in crypto.

Consequences of the war also came front in the form of crypto payments acceleration on the darknet like applications. Darknet refers to the secretive internet where criminals indulge in activities like ransom, computer attacks, selling drugs, illegal weapons, and active illicit activities.

Authorities all around the world are looking to make crypto under their traditional laws, including counter-terrorism financing and anti-money laundering, etc. Such rules need companies to handle crypto in order to seek authorization and comply with strict regulations on the client’s fund’s source.

This seems to be an all good situation, more of a utopia. From far away, such rules seem effective and worth welcoming to prevent the wrongdoings and customer protection, especially when it comes to retail investors having less knowledge and more exposure to risks from unethical operators.

On the contrary, the regulation also needs to allow the development of this revolutionary sector so that countries like the United Kingdom can act as a rightful and opportunity-full place to be a fintech global hub. Additionally, it would have all the facilities, including high paying jobs and increased tax revenues.

But unfortunately, regulatory authorities in the UK are upto implementing their rules and regulation in a heavy handed way, harsh enough that they impose the risk of squashing the whole industry prospectus. Despite increasing consumer protection, such activities would undoubtedly increase the predatory behavior danger by driving offshore crypto companies into jurisdictions using little or no regulation.

The FCA or Financial Conduct Authority granted powers in 2017 for regulating businesses in contact with crypto assets to trade in Britain and require companies to get registered with the authority before starting. In January 2020, the registration process started and was conducted only at the end of last month.