The UK’s Financial Conduct Authority has issued warnings on two Bitcoin dealers over a lack of licensing.
While cryptocurrency enthusiasts love its decentralized nature, governments are not so enamored. Countries are looking at putting more regulations upon the crypto space. Japan is one such example as the country has officially licensed 16 cryptocurrency exchanges. Such regulations and licensing are normally done to protect consumers, and government agencies are not amused if someone chooses to operate without a license. The Financial Conduct Authority (FCA) in the United Kingdom has recently taken two Bitcoin dealers to task, issuing a warning that they are operating without authorization.
Bitcoin Dealers Busted
The FCA yesterday issued a warning to consumers about two Bitcoin dealers: Local Bitcoin Ltd and BK Coin. The alerts contain the same information, which read:
We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.
The FCA warnings continue with:
Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorised by us.
However, some firms act without our authorisation and some knowingly run investment scams.
This firm is not authorised by us and is targeting people in the UK. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.
Operating Without a License
The two Bitcoin dealers apparently offer investment services to customers. From all accounts, the two entities are owned or operated by the same group. The website for Local Bitcoin Ltd was created on March 29th, 2018, while BK Coin was created on January 9th, 2018.
Apparently, the warning issued by the FCA has had some effect. The site for Local Bitcoin Ltd is not working, and the site for BK Coin has its landing page in French, even after you choose the UK option. So it seems that the two Bitcoin traders are backing off.
The FCA takes its duties seriously, and it has been pretty fair with cryptocurrency operations. Last month, the FCA issued warnings on several cryptocurrency clone firms. These are illegitimate companies that attempt to scam people by pretending to be a legitimate company that has been licensed by the FCA. By mid-August, the watchdog had already issued 10 clone warnings.
In better news, the FCA approved an e-money license to Wirex a week ago. This license allows the platform to provide payment services and issue electronic funds. The Wirex approval followed on the heels of both Coinbase and Circle gaining e-money licenses.
While regulations are never considered fun, the reality is that there are a lot of scams out there in the cryptocurrency ecosystem. To date, almost $100 million has been lost to ICO exit scams alone. While many crypto enthusiasts grumble about regulation, their tune often changes when the Wild West nature of the cryptocurrency ecosystem bites them in the rear and their funds disappear. Suddenly, having protections in place and law enforcement cracking the whip are good things.
Have you ever been scammed by an unlicensed crypto dealer? Let us know in the comments below.
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