The UK’s Financial Conduct Authority (FCA) CEO Nikhil Rathi testified to the Treasury Select Committee on Wednesday, stating that the agency is unable to provide a regulatory framework that protects crypto investors from losses. The FCA currently holds powers to enforce anti-money laundering rules and ensure crypto companies register, but has no authority to prevent consumers from experiencing losses. Despite the new Financial Services and Markets Bill that could extend FCA’s regulatory authority over crypto, it still won’t include any consumer loss protection.
FTX and Celsius Network bankruptcies trigger billions in losses
During the hearing, newly appointed FCA chair Ashley Adler urged for “tough” regulatory oversight of the crypto industry, stating that it needs to “detoxify.” The hearing also revealed that FTX and Celsius Network’s bankruptcies caused billions in losses, with FTX resulting in 80,000 UK crypto traders losing their funds.
Poor communication from the agency contributes to low approval rates
Although 14% of crypto companies who applied for registration with the FCA have won approval, CEO Rathi referred to most of the applications as “exceptionally” poor. He stated that the FCA needs to communicate its expectations better, a step that the agency started in January.
Source: Coindesk
