The Chair of The United Kingdom’s Financial Conduct Authority has warned the regulators regarding the over-reach of regulatory authorities. The chair of The United Kingdom’s Financial Conduct Authority also said that protecting the consumer investment is the sole responsibility of regulators, but overreach of regulations can backfire massively as people can think of it as some sort of ban on their freedom.
Charles Randell, chair of the FCA and Payments System Regulator, in his speech written for the Cambridge International Symposium on Economic Crime, said that the real problem with society is that people involved with the crypto market lacks the awareness of the risks. He said that people are blindly investing money in the crypto market. However, regulatory authorities have become obsessed with crypto regulations. Both approaches are extreme in nature. He singled bashed the role of media and influencers, in particular.
He pointed out Kim Kardashian’s promotion of EthereumMax (EMAX), he said that media channels will have multiple says on the event. This would not just impact investor’s decision towards buying this newly launch token, but it would also play important role in the regulator’s opinion.
However, Randell avoids any judgment regarding the EthereumMax legal position, whether it’s fraudulent or not. But he criticized the role of media and blamed media for the customers’ ill awareness. He said that this sort of promotion can be disastrous and misleading for society.
Where he pointed at consumer’s lack of information about the cryptocurrency, he also talked about the risks consumers are taking while investing in crypto. He also added that aggressive regulatory sanctions are not the real solution as customers will always find a way out of those sanctions. He added that this aggressive regulatory approach has made regulators a villain in common men’s eyes. If regulators kept pushing on in the same direction this perception of villains will only grow stronger.
He said that there are other industries gold and foreign currency trade where people are free to trade, and these sectors to be unregulated. He criticized this approach of law enforcement authorities. “There is no shortage of consumer harm in other markets,” he said.
As of this writing, the FCA has banned the sale of crypto derivatives to retail customers. Randell proposed a different solution to the problem going forward. The decision should be made with a limited scope rather than banning the whole industry. A review policy should be introduced regarding the stablecoins and security tokens, he further added. Stablecoins and security tokens: both can bring in encouraging new ideas for cross-border payments and cross-border payments can be made much faster as well. He said that rather than banning digital tokens, it is time for FCA to ban misleading crypto promotional activities.