FCA Expands Crypto Team

The UK's financial watchdog has bolstered its workforce dedicated to crypto, increasing the number of staff to 100. This expansion comes as the Financial Conduct Authority (FCA) grapples with new regulatory issues in the digital asset market.

These members are dispersed across six teams specifically focused on the sector, the Financial News reported Thursday, citing data obtained through a Freedom of Information Act request.

Increasing Oversight and Regulation

The FCA has been overseeing money laundering and terrorist financing checks in the UK crypto sector since 2020. Its role has grown steadily, and now crypto firms offering exchange services or custody wallets need FCA registration to operate. The government is also working to give the FCA complete control over regulating cryptoassets in the UK.

UK Watchdog Expands Team for Crypto Licensing, Policy

Most of the FCA's crypto staff is focused on approving licenses for firms and monitoring them afterwards, the outlet reported. However, the division saw the biggest staffing jump in its policy department last year. This reflects the ongoing collaboration between the FCA and the government as they work on creating a more thorough set of crypto regulations for the UK.

The FCA has reportedly stated that its staff may work on crypto projects alongside other sectors within teams that have broader responsibilities. Additionally, it is already preparing for future regulations in areas like stablecoins.

FCA Remains Cautious

In 2023, the FCA threw significant resources at crypto oversight, with nearly a third of its financial crime specialists tasked with crypto businesses. Their stringent review process exposed weaknesses in anti-money laundering controls at many firms, leading to a wave of withdrawn, rejected, or refused applications.

Meanwhile, despite the rising popularity of crypto exchange-traded products, FCA is taking a measured approach to crypto. It is currently restricting access to these ETPs to professional investors, using recognized exchanges, and not allowing retail participation.

Future Prospects

The regulator didn't return Cryptonews' request for comment by press time. However, the FCA's ongoing commitment to expanding its team and refining its policies signals a determined approach to tackling the complexities of the rapidly evolving crypto market.