British investors have been warned not to take out any cryptocurrency-related services with Local Bitcoin Ltd and BK Coin, as the Financial Conduct Authority (FCA) today said the two brands are not authorized to provide investment services or activities in the country.
The warning comes as European finance ministers are scheduled to discuss cryptocurrencies next week to investigate their benefits and risks and consider how the new asset should be regulated.
The U.K. has so far taken a more watchful approach. The FCA itself doesn’t consider cryptocurrencies regulated assets, but derivatives on the back of them fall under its powers of oversight. Last month, it named a small number of crypto-linked firms as having been accepted within its sandbox, which allows testing their solutions and business models in a live market but controlled environment.
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Back to the warning, Local Bitcoin Ltd and BK Coin, apparently run the by the same persons, are targeting UK investors offering a full range of cryptocurrency investment services, including CFDs, but the City watchdog stressed the regulation claims on its websites are fake.
This warning is yet another case in which British authorities seem to have stepped up their game and have gone after illegal cryptocurrency brokers. In November 2017, FCA issued a warning for investors in cryptocurrency contracts for difference (CFD), mentioning the risks involved.
Last month, the UK Prudential Regulation Authority issued a letter to CEOs of banks, insurance companies, and investment firms to advise them about the risks associated with “crypto-assets.” The PRA’s letter has provided the financial operators with guidelines to improve their oversight, increase scrutiny and enhance due diligence checks.