The U.K.’s public spending watchdog, the National Audit Office, has said the Financial Conduct Authority (FCA) is slow to take enforcement action, pointing to its handling of crypto firms over the years.
While U.S. regulators recently made headlines for a $4 billion settlement with the world’s largest crypto exchange, Binance, the U.K. has proceeded slowly by comparison.
“Even when an issue falls inside the FCA’s perimeter, or it has the power to act, it can take years for the FCA to implement any enforcement action,” the NAO said in a Friday report.
The FCA has required crypto firms to register to comply with the country’s anti-money laundering regulations since January 2020. Although it then began supervision work, including engaging with unregistered firms, “it did not begin taking enforcement action against illegal operators of crypto ATMs until February 2023,” according to the report.
“The FCA reported publicly that it saw a significant drop of 68% in reported crypto ATM activities in 2022, although not all of this could be attributed to FCA activity,” the report said.
The financial regulator has consistently faced criticism from the crypto industry over the slow processing of registration applications. According to the report, the FCA blames its lack of speed on poor staff retention.
“The FCA has found recruitment and retention of staff with crypto compliance skills is difficult due to competition between employers for people with these skills,” the report said.
The report also noted that the FCA has dealt with 1,400 cases related to unregulated crypto activity between January 2020 and June 2023.
The FCA received additional powers over the crypto sector with the passing of the Financial Services and Markets Bill early this year, which recognized crypto and stablecoins as regulated financial services and has begun to use its new powers.
