UK Financial Regulator Expands Cryptocurrency Team to 100 Members

The UK’s Financial Conduct Authority (FCA) has increased its dedicated cryptocurrency workforce to 100 employees. This expansion addresses new regulatory challenges in the digital assets market.

According to data obtained through a Freedom of Information request, these employees are spread across six teams focused specifically on cryptocurrency. Since 2020, the FCA has been overseeing anti-money laundering (AML) and counter-terrorism financing (CTF) checks in the UK’s crypto sector. The agency’s responsibilities have grown, requiring crypto companies offering trading services or wallet custody to register with the FCA to operate legally.

The UK government is also working to grant the FCA comprehensive regulatory authority over crypto assets in the country. The majority of the FCA’s crypto team focuses on licensing approvals and ongoing monitoring. Notably, the policy department saw the most significant increase in staff last year, reflecting the FCA’s collaboration with the government to develop more robust cryptocurrency regulations.

The FCA is preparing for future regulations in areas like stablecoins. The staff may also work on projects in broader teams beyond their immediate crypto-specific roles.

In 2023, the FCA dedicated substantial resources to cryptocurrency regulation, with nearly one-third of financial crime experts focusing on crypto. Their stringent review processes have uncovered weaknesses in many companies’ AML controls, leading to numerous application withdrawals, rejections, or dismissals.

Despite the growing popularity of crypto exchange-traded products (ETPs), the FCA maintains a cautious stance on cryptocurrencies. Currently, it restricts ETP access to professional investors through recognized exchanges, excluding retail investors.