April 19, 2024
UK Regulator Takes Aim at Crypto Market Abuse with Tighter Measures
Policy & Regulation

UK Regulator Takes Aim at Crypto Market Abuse with Tighter Measures

Amid growing concerns over market abuse in the cryptocurrency sector, the UK’s Financial Conduct Authority (FCA) has outlined its plans to bolster its capabilities in detecting and pursuing such activities over the next 12 months.

In its strategic goals for 2024 to 2025, the FCA has prioritized tightening measures against crypto market abuse and enhancing its monitoring and intervention systems to ensure market integrity.

Enhanced Monitoring and Intervention Systems

The FCA plans to enhance its monitoring and intervention systems to cover market abuse and integrity issues within the crypto sector. This includes developing advanced analytics capabilities such as network analysis and cross-asset class visualizations to effectively detect and combat illicit activities in the digital asset space.

Acknowledging the need for a proportionate market abuse regime tailored to the unique characteristics of crypto assets, the FCA has committed to assisting in the development of such regulations.

The regulator aims to collaborate with industry stakeholders to establish a framework that fosters innovation while ensuring investor protection. “We will assist in delivering a proportionate market abuse regime for Crypto Assets and the PISCES facility,” stated the FCA.

The FCA listed its goals for the next 12 months. Source: FCA

Supporting Innovation while Ensuring Compliance

Despite the added regulatory requirements for crypto companies, the FCA emphasized its commitment to supporting innovation in the industry while simultaneously addressing compliance concerns. The regulator aims to develop frameworks that promote innovation and lower industry costs while upholding regulatory standards.

In addition to monitoring market abuse, the FCA will continue to supervise financial promotions published by crypto firms. The regulator plans to leverage enhanced technological capabilities to detect promotional material that may pose risks to investors. Furthermore, the FCA intends to bolster consumer awareness campaigns to educate investors about potential scams in the crypto space.

Enforcement Actions Against Illegal Crypto Advertising

Despite previous efforts to guide marketing rules, the FCA reported a surge in illegal crypto advertisements. In 2023 alone, the regulator issued 450 alerts for illegal crypto ads.

The FCA reiterated its commitment to taking action against companies that breach advertising rules and emphasized its ongoing efforts to combat illegal crypto marketing promotions in 2024.

As the cryptocurrency market continues to evolve, regulators like the FCA are stepping up their efforts to address emerging challenges such as market abuse and fraudulent advertising.

By enhancing monitoring capabilities and collaborating with industry stakeholders, the FCA aims to foster a safe and transparent environment for crypto investors while promoting innovation in the sector.

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