The former head of the UK’s Financial Conduct Authority (FCA), Charles Randell, said he was politically pressured to welcome crypto firms. The prevailing rhetoric was around how the UK was missing out on an “innovative activity” that was gaining traction in other jurisdictions.
Randell, who stepped down in the spring, said many of the firms that were not allowed to operate are now being investigated by the US Department of Justice. While he didn’t mention names, the FCA denied Binance and FTX licenses to operate in the UK, both of which are linked to ongoing litigation in the US.
Former FCA Head Cautioned Against Moving Too Fast
Speaking at a conference hosted by the Prudential Regulation Authority of the Bank of England, Randell reflected:
“… all the evidence that we had at the FCA was that it wasn’t a very good idea.”
He said the saga highlighted the challenge in regulating the industry while preventing its capture by the industry or politics. US prosecutors have charged former FTX CEO Sam Bankman-Fried with several fraud and campaign finance law violations.
Learn more about the collapse of Bankman-Fried’s FTX empire here.
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During his tenure at the agency, Randell warned against rushing to make the UK a crypto hub. In a speech at the time, Randell argued for an “independent” regulator to implement “strong safeguards” to protect investors.
His comments followed a speech by Treasury Secretary John Glen outlining a government roadmap to attract and grow crypto startups. Former Chancellor and current Prime Minister Rishi Sunak first promoted the narrative of turning the UK into a “global hub” for crypto in April 2022.
Crypto Regulation is Progressing but Political Focus Shifts to AI
So far, the FCA has rejected applications by most crypto firms to secure licenses in the UK. In most of the rejected applications, the FCA cited inadequate money laundering controls as the reason.
Since then, however, King Charles gave his royal assent to a bill designating crypto trading a regulated activity. It gives the UK Treasury, the FCA, the Bank of England, and the Payments Systems Regulator rulemaking powers.
Understand the state of global crypto regulation in our primer here.
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The rules may require another 12 months to finalized, Financial Services Minister Andrew Griffith said in April. The UK Law Commission has proposed ownership guidelines that deem crypto as assets protected by property law.
In the meantime, it appears that political attention has shifted from crypto to artificial intelligence (AI). Sunak will host a meeting of top academics and executives from Google, DeepMind, OpenAI, in November to discuss AI’s future.
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