United Kingdom regulator the Financial Conduct Authority has warned consumers over dealing with 111 cryptocurrency-related businesses operating without the required registration.
The FCA notes that the entities threaten the financial system while also warning banks and payment firms against engaging with the businesses, Reuters reports.
“We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firm, consumers. This is a very real risk so we are worried about that,” said Mark Steward, FCA’s head of enforcement.
In January, the FCA enacted new regulations that require businesses in the crypto space to get full certification from the regulator before operating. In addition, the regulator introduced a temporary licensing plan for firms whose applications are pending approvals to continue trading.
The new law followed the appointment of the anti-money laundering and counter-terrorist financing supervisor of cryptocurrency firms. However, only a section of the businesses has complied with the new directive.
Males over 35 years most vulnerable
According to Stewart, the unregistered businesses might take advantage of potential investors who fear missing out on the cryptocurrency rally. He notes that males over the age of 35 years are the most vulnerable to fall victims.
“The reason many are investing now is because they have a fear of missing out on what might be a boom. Leaving aside how volatile these instruments actually are, it has tulip mania written all over it,” Stewart added.
Notably, about 2.5 million UK adults hold various digital currencies, with a majority acquiring the assets amid the coronavirus pandemic.