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In a recent report by the National Audit Office (NAO), the UK’s Financial Conduct Authority (FCA) has come under scrutiny for its sluggish approach to enforcing cryptocurrency laws and its staffing challenges in the crypto sector. The report highlights concerns about the FCA’s ability to effectively regulate the rapidly growing cryptocurrency market. FCA Crypto enforcement delays raise concerns The NAO report points out that the FCA, responsible for overseeing financial regulations in the UK, mandated compliance with anti-money laundering (AML) regulations for digital asset firms in January 2020.  However, it was not until February 2023 that the FCA initiated enforcement actions against illegal operators of cryptocurrency ATMs. This delay in enforcement has raised concerns about the FCA’s ability to address risks effectively within the crypto sector. One of the key issues highlighted in the report is the shortage of staff with expertise in cryptocurrencies within the FCA. While the authority has been implementing changes in its data management practices to identify risks more efficiently, the report suggests that these efforts are expected to take years, with data risks not anticipated to be mitigated before 2025. Staff turnover, particularly in specialist areas, has been a persistent challenge for the FCA in recent years. Although overall turnover rates have decreased, the report indicates that delivery risks remain high in some specialist areas. To address this issue, the FCA has recruited and trained over 2,000 new staff members, including seven out of 11 senior officials who joined since September 2020. This recruitment drive aims to ensure that the FCA maintains the necessary specialist skills and expertise to regulate the cryptocurrency sector effectively. International collaboration and crackdown on illicit activity Recognizing the global nature of the cryptocurrency market, the FCA has been actively enhancing its international engagement efforts. It has established a new international…

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Filed under: News - @ December 9, 2023 9:20 am