The Financial Conduct Authority (FCA) has advanced inquiries into crypto related business according to the latest statistics shared to Telegraph Money. The move that has been evidently triggered by the recent collapse of Bitcoin prices seeks to root out unauthorized exchange platforms to prevent incidences of fraud.
The cryptocurrency sector that has been largely operating under fewer restrictions has since attracted a lot of attention from regulating bodies following the sudden price crushes. For the second week in a row, Bitcoin prices are plunging and investors are feared to have lost millions if not billions. Bitcoin is currently trading below the $4,000 mark from an all time high of about $20,000.
The industry is in panic and regulators together with critics now more than ever are convinced that a huge scam is in play. According to the latest data, the number of crypto firms under the FCA radar has doubled.
Beefed scrutiny efforts
The regulating authority has confirmed that it is currently investigating 50 firms for allegedly operating without approval. As at May 2018 the number of firms under scrutiny was twenty four.
This year alone, FCA has received 7 credible reports on financial crimes from employees of cryptocurrencies operators. For the past three years when Bitcoin’s value was kind of ‘stable’ there were no such “whistle-blowing.”
The concept of cryptocurrency has been around for close to a decade now. In the last quarter of 2017 Bitcoin prices soured unexpectedly attracting the attention of both corporate and retail investors. Some were thrilled by the idea of a decentralized currency in which one can trade with anonymously- a currency that was not subject to central banks’ regulation. Another group simply saw an investment opportunity and for fear of not missing out rushed to get a piece.
In the first quarter of this year, Bitcoin prices fell from its peak and stabilized at slightly over $6,000 for the better part of the year. However, the recent price crash is what has drawn regulators’ attention. Commentators speculate that the recent crash is likely to expose fraudulent activities in the sector.
The numerous cases being reported to the FCA is likely fanned by bitter users who have suffered immense loses from the coin’s plunged value.