The U.K.’s financial watchdog is reportedly investigating 50 crypto-related firms, specifically those it suspects are operating without permission in certain financial service subsectors. This jaw-dropping sum is double the amount it had investigated earlier this year.
The Recent Crypto Crash
With Bitcoin (BTC) leading the way in 2017’s crypto fever, after surging to nearly $20,000. This new digital asset class has gained mass attention, including that of a growing set of institutional investors.
However, since the start of 2018, the price of Bitcoin (BTC), and other popular cryptocurrencies such as Ethereum & Ripple (XRP), has crashed significantly.
BTC has dropped below $2,500 in the past two weeks, down over 80% from it’s all time high. The lowest BTC’s value has been at in 18 months. This, in turn, has dragged down a majority of other crypto assets to catastrophic low as well… oops!
Reasons For A Rise In Investigations
According to a partner of accountancy firm Moore Stephens, the recent crypto crash will have triggered many complaints made to the Financial Conduct Authority. The partner, Andrew Jacobs, explained:
“The huge sums lost as a result of cryptocurrency prices falling this year will have triggered a rash of complaints to the FCA”
He went on to add:
“Now that prices have collapsed, fraud is likely to be exposed, with greater pressure coming to bear on the FCA to ensure that this market can operate transparently and fairly.”
The FCA has also reported that it has opened seven whistleblower reports in 2018, all of which were related to the cryptocurrency industry. In previous years there reportedly had been none.
The FCA’s Christopher Woolard was recently quoted stating his concern about retail consumers being mislead by various crypto investment products,
“We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues”.
Growing concerns will most likely lead to increased pushes for a better regulated crypto environment, but the recent tumble in prices is said to have eased pressure on U.K. authorities to finalise any cryptocurrency-related regulations.
Viewing The Positives
Crypto has been going on hard times, that’s for sure. But these current market circumstances could help weed out dodgy cryptocurrency schemes that are misleading retail investors, helping to legitimise this volatile asset class and bringing more trust to the industry.
A recent report published states that 93% of British people have heard of Bitcoin, with one in five people seeing Bitcoin becoming as common as cash & card in the future, showing that the awareness of this revolutionary form of transaction is soaring.
My opinion is that cryptocurrencies aren’t going anywhere; in the long-term, I feel the demand for digital currencies will soar. Ever growing uncertainty in the global economy being the root cause.
However, in the short-term, there are some obvious hurdles for Bitcoin and its fellow cryptos to get over. Regulation being a big factor, before we start seeing another strong rise in the crypto markets.
What’s your opinion on the current cryptocurrency climate? When do you think we’ll start to see a positive move for cryptos? & what’s likely to trigger the next crypto-BOOM?
Leave a comment below, we are looking forward to hearing and responding to your thoughts!