Nikhil Rathi, the Chief Executive Officer of the United Kingdom Financial Conduct Authority (FCA) has taken a harsh stance against the chances of victims of digital currency scams receiving compensation from the government.
Speaking through a statement to the Treasury Committee, Rathi commented about the risks of the much-unregulated cryptocurrency sector in the country:
“When we talk about the compensation scheme, we have to draw some pretty clear lines. I would suggest anything crypto-related should not be entitled to compensations, and consumers should be clear about that when investing,”
Governments around the world are still sceptical enough concerning investments in digital currencies. This is in part related to the fact that the industry has no trusted investment safeguards and users have been subjected to a series of scams around the world. A unit of the FCA, the Financial Services Compensation Scheme (FSCS) has been living up to the task of compensating victims of rug pulls in the crypto space. This year alone, a total of 717 million pounds have been issued out in total.
According to the stance of Rathi, the UK may soon introduce a rule that will take away this privilege from crypto investors. While the regulator is not entirely against the blockchain ecosystem, support for investing in speculative assets is billed to be stumped.
“There are technologies underpinning cryptocurrencies, which, I think we would recognize, as having significant benefits and value, such as tackling financial crimes. A number of innovations, however, we have raised concerns around,” said Rathi when asked about the country’s regulatory framework.
“Some of these crypto-assets, we don’t believe have intrinsic value. They have been a part of a series of organized crimes and money laundering, and anyone who invests in them must be ready to lose all of their money.”
Different regulators are exploring their own unique avenues to protect crypto investors on their shores. As the nascent industry grows towards maturity, industry stakeholders are likely to continually advocate for progressive regulations that can bolster a good growth of all parties of interest in the ecosystem.
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