The Financial Conduct Authority (FCA) in the United Kingdom said it arrested two individuals suspected of operating an illegal crypto asset exchange.
On June 19, the FCA said the illegal business was believed to have bought and sold more than 1 billion British pounds ($1.2 billion) worth of unregistered crypto assets. During raids of offices associated with the suspects, the FCA seized multiple digital devices.
FCA compliance
Therese Chambers, the executive director of enforcement and market oversight at the FCA, said that the regulator plays an “important role” in keeping “dirty money out of the U.K. financial system.”
“These arrests show we will do everything in our power to stop crypto firms from operating illegally in the U.K.”
The FCA interviewed the two suspects who were arrested and released on bail, though the investigation is ongoing.
In the U.K., crypto asset exchange operators must register with the FCA directly and comply with money laundering regulations to ensure legal operations. This has been the case since January 2021.
Charlotte Tregunna, a crypto fraud expert and partner at the business crime law firm Peters & Peters, said that given that these exchange requirements have been active for so long, it would be “difficult to persuade the FCA” that it is unaware of any requirements.
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“Even more so if they had applied to the FCA previously for registration, and were one of the 86% [of exchanges] who have been rejected, and carried on regardless,” she said, adding:
“While this might be a case the FCA point to in the future as a successful demonstration of its ability to crack down on exchanges operating illegally, it might also be a sad indictment of the fact that regulatory clarity for market participants and service providers is still in limbo.”
Election influence
The U.K. is currently heading into a general election, which will take place on July 4.
Tregunna said that the election has “disrupted” the U.K.’s path to full crypto regulation. Nonetheless, crypto service providers should be aware that they must register with the FCA.
“Whomever wins the election in July should make it a priority to steer the UK back onto the regulatory path it was previously heading towards. And they should pick up the pace while they’re at it!”
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