The UK’s Financial Conduct Authority has urged British managers to “take reasonable and proportionate measures” regarding clients working within the cryptocurrency industry. The warning comes in a letter addressed to “Dear CEO” and headed “CRYPTOASSETS AND FINANCIAL CRIME.”
The UK have no intention of supplanting the Pound, with Euros, Bitcoin, or anything else. The UK government made sure it didn’t surrender its precious Pound Sterling during the height of pressure from the European Union more than a decade ago, even though the French bid farewell to the Franc, the Spanish surrendered the Peseta, the Italians said “ciao” to the Lira and Germany dropped the Deutschmark, as many great European currencies fell in favor of the Single Currency of the Euro.
By that same (digital) token, the UK government seem convinced that cryptocurrency is a threat to Sterling, and are therefore taking whatever preemptive steps they believe are needed to keep it away from their shores, be it as a Parliamentary hearing on blockchain, or in this case, a letter to bank bosses.
UK FCA Implores Bank Bosses Be Vigilant For Crypto Crooks
The UK’s financial regulator, the Financial Conduct Authority (FCA) has implored bank bosses throughout the country to reduce the potential risk of financial crimes brought on by the abuse of cryptocurrencies.
An email containing a PDF letter was addressed to domestic bank CEOs on Monday by the FCA. In the letter, the FCA make it clear they require banks to increase their vigilance and be aware of those clients who “derive significant business activities or revenues from crypto-related activities.”
Those clients include representatives of cryptocurrency exchanges, individual clients who trade in cryptocurrencies, and companies that arrange, launch or participate in initial coin offerings (ICOs). The FCA explain that this is a new form of fundraising designed to raise a lot of money quickly to launch a new cryptocurrency, and is open to any amount of criminal activity.
The FCA classifying cryptocurrencies as ‘cryptoassets’, and suggest they can be ‘abused’ due to their potential for anonymity.
Here is the complete letter the FCA sent to all UK banks on Monday.
FCA’s Suggestions To Counter Crypto-Crime
The FCA’s recommendations to counter this apparent coming wave of crypto-crime includes:
- Carrying out due-diligence on key crypto clients
- Engaging with those clients to “understand the nature of their crypto-related businesses and the risks they pose.”
- Ensure that existing financial crime frameworks “adequately reflect the crypto-related activities which the firm is involved in.”
- Banks should educate staff to understand cryptocurrency so as to “identify the clients or activities which pose a high risk of financial crime.”
The UK authorities would do well to remind themselves of the cardinal rule that goes -Whenever an authority figure (parent, school teacher, government) goes out of its way to paint something as bad, taboo, even illegal, it only makes the public at large more interested in it, and willing to give it a go!
This rule applies to teachers telling children not to “run down the hall” or “walk on the grass”, to parents warning their teenage daughters never to see a particular “bad” boy again, or telling their kids not to smoke or drink alcohol, or governments imposing penalties on anything from playing music too loud to pot smoking.
Make it “taboo” and everyone will want to try it! (Are you listening UK FCA?)