UK Financial Watchdog Issues Second Crypto ‘Clone Firm’ Warning This Week

The UK Financial Conduct Authority (FCA) has sounded an alarm over yet another clone company on the cryptocurrency scene. In a second such warning in a week, the financial regulator said on Wednesday that a company called Good Crypto was impersonating FCA-authorized firm Arup Corporate Finance to lure and possibly scam investors.

LIONBIT

Currently, the website of the fake venture is still live, offering a wallet that supports various digital currencies, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), NEM (NEM), NEO (NEO) and Dash (DSH). The firm assures investors that the service is “highly stable and secure”.

Apart from the questionable advertisement, Good Crypto provides contact details, which the FCA warns “may be false” or “mixed” with details of Arup. The regulator further noted that the real, registered firm has no association with Good Crypto.

TIP

The FCA warning comes just a day after the authority brought another suspicious operation to public attention. Fair Oaks Crypto has been revealed to be manipulating investors by claiming the name, the company reference number, and the address of asset management and advisory services provider Fair Oaks Capital.

“[F]raudsters usually use this tactic when contacting people out of the blue, so you should be especially wary if you have been cold called. They may use the name of the genuine firm, the ‘firm reference number’ (FRN) we have given the authorised firm or other details,” the FCA stated.

As cryptocurrencies are not regulated by the FCA, investments are not protected by UK’s Financial Services Compensation Scheme and victims are unlikely to recover lost funds. Thus, FCA has asked investors to be vigilant when investing in any company, noting that they should check first if the company is in the Financial Services Register or the Interim Permission Register. In the event that one finds a clone company, they should report the company to the FCA to stop the fraudulent activities and bring the criminals to justice.

Earlier this year, the FCA launched a cryptocurrency task force in collaboration with the Bank of England to examine the various ways cryptocurrency technologies can be supported and regulated by the authorities. In another attempt to protect investors, the FCA opened investigations on 24 cryptocurrency businesses to determine whether they require FCA authorization.


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UK watchdog says license needed to trade cryptocurrencies

LONDON – Britain’s financial watchdog said on Friday that firms offering services linked to cryptocurrency derivatives must meet all relevant rules in the regulator’s handbook or could face sanctions.

The Financial Conduct Authority (FCA) does not currently regulate cryptocurrencies.
But it said that dealing or arranging transactions in, advising on or providing other services related to derivatives referencing cryptocurrencies or tokens issued through an initial coin offering (ICO), would likely require its authorization.

This includes cryptocurrency futures, cryptocurrency contracts for differences (CFDs) and cryptocurrency options, it said.

The FCA warned consumers last September that ICOs were high risk and speculative.
Europe’s top markets watchdog warned in November that new crypto coins could turn out to be worthless.

Demand for cryptocurrencies has pushed up prices for currencies such as bitcoin BTC=BTSP to a record high of more than $19,000 in 2017, before concerns that regulators may step in sent markets tumbling.

In March, financial policymakers from the world’s 20 leading economies called on national regulators to monitor the development of crypto-assets and their risks, but stopped short of coordinated action due to a lack of consensus.

The FCA’s move follows an announcement last month by finance minister Philip Hammond, who said Britain would set up a task force both to manage the risk around crypto assets and exploit the underlying blockchain technology.

In its statement, the FCA said: “It is firms’ responsibility to ensure that they have the appropriate authorization and permission to carry on regulated activity.”

“If your firm is not authorized by the FCA and is offering products or services requiring authorization it is a criminal offence. Authorized firms offering these products without the appropriate permission may be subject to enforcement action.”

Jake Green, regulation partner at law firm Ashurst, said: “To some degree this (FCA statement) clears up a small degree of academic uncertainty. Regardless, it must be the correct decision and shouldn’t come as a shock to many.”


 

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author’s Simon Jessop, Emma Rumney

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