FCA reveals 50 cryptoasset investigations

The Financial Conduct Authority (FCA) has revealed that it opened over 300 cases relating to potentially unregistered cryptoasset businesses over a six month period last year, many of which it suspected of being scams.

The UK’s financial regulator confirmed that it currently has 50 live investigations, including criminal probes, into unauthorised businesses.

The top types of scams being reported to the FCA included cryptoasset, boiler room and recovery room scams.

The regulator said that between April and September last year, it received a total of 16,400 enquiries about possible scams, up nearly a third from the same period in 2020.

The FCA said the cases were opened as part of its efforts to take ‘assertive’ action to tackle harm in the consumer investments market, with 1 in 4 firms stopped from entering this market over the 6 month period.

The FCA said it is drawing on all the tools at its disposal, including more assertive supervision and enforcement action, and being tougher with firms who want to operate here.

The latest data shows a quarter of applications from firms wanting to join the consumer investment market are being stopped by the FCA.

The proportion is up from 1 in 5 in the last financial year.

A total of 9 of these firms were prevented from gaining authorisation where it was suspected that individuals responsible for unsuitable advice tried to avoid the consequences of their actions by moving to or setting up new firms, or individuals set up and sought authorisation for a new firm before their existing firm started to receive complaints about poor past advice.

The FCA’s ScamSmart campaign encourages those considering investing to check its dedicated website. The site features an online tool, and the Warning List, which allows users to find out more about the risks associated with an investment and view a list of firms the FCA knows are operating without its authorisation.

The FCA's InvestSmart campaign launched in October 2021, targeting consumers who are new to investing, and aims to provide them with information to make better-informed investment decisions.

Sarah Pritchard, executive director of markets at the FCA said: “Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be.

"Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed. Find out how to avoid scams on the ScamSmart website and get tips on investing safely on the InvestSmart website.”

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