FCA Hits on Kraken; Says It's Unauthorized to Operate in UK

Ibiam  |  Mar 4, 2020

In what could be assumed as a destabilizer for cryptocurrency adoption in the United Kingdom, the Financial Conduct Authority (FCA) has said that the long-standing cryptocurrency exchange, Kraken is unauthorized to operate in the UK.

According to an FCA report on Wednesday (which has been removed), the regulator warned Kraken against their business activities in the country, despite the popularity and status of Kraken as one of the top-rated exchanges in the digital currency Industry.

FCA's statement indirectly claimed that Kraken exchange is too risky for public use. More like a caution, the regulator also advised in the report on how consumers can protect themselves against such unauthorized companies in the country.

The development today has raised concerns, due to the fact that Kraken has been around since 2011. Moreover, the announcement today from the regulator mostly centred on defaming the exchange, without emphasizing how using Kraken exposes users to risks.

FCA Hit on Cryptocurrency Services

Notably, the regulatory agency oversees all crypto-asset companies in the country, at the moment. However, many people think that FCA is hitting hard on crypto Industry, following its actions towards related companies, which looks somewhat stringent.

Companies or businesses dealing with digital currencies in the country are required to be authorized by the FCA, which reportedly costs a hefty fee. This is quite a thorn in the neck for crypto startups in the UK, as they may be forced to shut down or migrate to a favourable region.

Meanwhile, these companies, including exchanges, are not the only one affected. Starting from 2018, FCA has been going after crypto-backed derivatives markets. In late 2019, a bill was proposed against the market and, it is yet to be approved.

Although, FCA may have found out that Kraken is 'unauthorized,' however, it should be consistent with its actions and also throw more light on its policies, than approaching exchanges as though they are 'scammers,' which might tarnish their long-standing reputation.

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