The Financial Conduct Authority has arrested two suspects involved in running an illegal crypto-asset exchange worth $1.2 billion, highlighting the agency's efforts to combat financial crime.
The UK's Financial Conduct Authority (FCA) said it has arrested two people suspected of operating an illegal crypto-asset exchange.
On June 19, the Financial Conduct Authority said the illegal exchange was believed to have bought and sold more than £1 billion ($1.2 billion) worth of unregistered crypto assets. During the raid on offices linked to the suspects, the Financial Conduct Authority seized multiple digital devices.
Compliance with the Financial Conduct Authority
The FCA questioned the two suspects, who were arrested and released on bail, although the investigation is still ongoing.
The FCA's executive director of enforcement and market oversight, Therese Chambers, said the regulator plays an "important role" in keeping "dirty money out of the UK financial system."
“These arrests show that we will do everything we can to prevent cryptocurrency companies from operating illegally in the UK.”
In the UK, operators of cryptocurrency exchanges must register directly with the Financial Conduct Authority and comply with money laundering regulations to ensure they operate within the law. This has been the case since January 2021.
For her part, Charlotte Trigona, a fraud expert in the cryptocurrency sector and partner at the law firm Peters & Peters, said that given that this exchange has been active for a long time, it will be “difficult to convince the Financial Conduct Authority” that it is not aware of any requirements.
She added: “If the suspects had previously applied to the FCA for registration, and were one of the exchanges that was rejected, and continued to operate despite this:
This case will be used by the FCA in the future as successful evidence of its ability to crack down on exchanges operating illegally. This case may also be an indication of the fact that regulatory clarity for market participants and service providers remains ambiguous.”
Electoral influence
The United Kingdom is currently heading to a general election, which will take place on July 4. Trigona said the election had “disrupted” the UK’s journey towards full cryptocurrency regulation. However, cryptocurrency service providers should be aware that they must register with the Financial Conduct Authority.”
She added: “Whoever wins the July election must make it a priority to redirect the UK back onto the regulatory path it was previously heading down. And they must accelerate the pace as they do so.”
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