In the City Week 2023 event, Sara Pritchard, Executive Director of Markets at the Financial Conduct Authority (FCA) delivered a speech on the regulation of digital assets in the United Kingdom. On 25th April, in a speech, she mainly focused on the cryptocurrencies and risks associated with them.
According to reports, Sara warned about the financial loss due to cryptocurrencies. The statement given by her at the City Week 2023 event highlights the need for a regulatory framework in the United Kingdom and its limitations in managing the crypto sector. Regulations may decrease the risks of financial loss due to crypto adoption but it will not stop the loss of finance. Additionally, she said that “the advertising of cryptocurrencies is anticipated to be regarded similarly to other high-risk investments, and failing to comply will be illegal.”
From cracking down on illegal crypto ATMs to imposing strict fines on misleading advertisements, the United Kingdom has been very active in sending strong messages to offenders. Sara Pritchard also mentioned her experience in the meeting held at the time of the collapse of one of the largest cryptocurrency exchanges in the world, FTX, last year. She praised the approach of the United States in containing the spread of the fallout of FTX and said, “It was instructive to see them work effectively and at pace to try to stop the fallout spreading.” The clients who invest in cryptocurrencies need to be prepared for unforeseen losses despite the sophisticated technologies involved in the monitoring of potential collapses. For example, a warning was issued one week before the collapse of FTX regarding its unauthorized operation in the United Kingdom.
According to Sara Pritchard, cryptocurrencies and blockchain are beneficial in many ways as they can offer a fast international payment system. Additionally, it is cheaper and helps our global workforce more easily send money to friends and family overseas. This is the reason despite facing huge losses the crypto sector kept increasing year by year. The Fidelity Institutional Investor Digital Asset Study estimates that in 2022, 67% of institutional investors in Europe and 42% of institutional investors in the US held cryptocurrency. Also, 1 in 10 adults of the population now holds crypto at some point and the United Kingdom is one of only two highly developed countries that adopted crypto.
At the City Week 2023 event other officials like the Commissioner of Commodities and Futures Commission, Christy Goldsmith Romero also shared her views on crypto and its illegal uses in terror funding. She highlighted how cryptocurrencies could be better managed in the future and its current trends. It will be interesting to see how the world will tackle the issues that are currently posing threats to the crypto sector.
