The former chairman of the Financial Conduct Authority (FCA) has claimed the watchdog faced “political pressure” to allow crypto firms to enter the UK market.

Charles Randell, who departed his role at the FCA last year, made the comments at a conference hosted by the Prudential Regulation Authority.

As per The Guardian, Randell told the conference: “In the context of crypto, in my experience as FCA chair, was that there was a lot of political pressure to welcome firms, some of which are now under criminal investigation by the US Department of Justice. And all the evidence that we had at the FCA was that wasn’t a very good idea.”

The FCA has been critical of cryptocurrencies and has kept a close watch on the rise of the asset class since 2017.

In a discussion on cryptocurrency in the House of Lords in January, the event report outlined the regulator’s view that consumers should regard cryptocurrency]investments as “high-risk and speculative" and that they should "be prepared to lose all their money”.

To address its concerns over crypto, the FCA has drafted new rules for crypto promoters which will come into force from 8 October.

The new rules mean firms promoting crypto must put in place clear warnings and ensure advertisements are clear, fair and not misleading, the watchdog said.

To comply with the rules, PayPal recently announced it would suspend cryptocurrency purchases through its platform from 1 October with plans for their resumption in “early 2024”.

While high-profile banks such as Deutsche Bank have recently made moves to hold crypto assets for the first time, the asset class remains mired in scandal. Confidence in crypto has struggled to rally since the collapse of the world's second-largest exchange FTX in late 2022 after $1 billion in client funds disappeared overnight.

Share Story: