.svg)
In a move that highlights the growing regulatory focus on crypto-assets, the UK's Financial Conduct Authority (FCA) has begun a search for a new head to lead a department dedicated to the supervision of crypto-related businesses.
The FCA has posted a job application on LinkedIn for “head of department digital assets” to “lead a new crypto department that will lead and coordinate the FCA’s regulatory activity in this emerging market”.
The advertisement describes the position as a "critical leadership role” within a new directorate that deals with emerging business models in the supervision, policy and competition division.
The candidate will be required to lead the FCA's response to “unregistered crypto asset businesses that may be involved in scams and frauds”.
The role also mentions supporting innovation in the crypto sector, helping “deliver the UK government’s vision on crypto-assets, influence future regulation, maintain market integrity and protect consumers as the popularity of crypto continues to increase.”
A key part of this new role is to maintain and expand FCA’s consumer protections by filtering out less scrupulous looking players in the sector, which fits in with the parameters set by the UK government on future expected crypto-asset regulation, as detailed by VIXIO.
Specifically, the government is looking to implement consumer protection and governance requirements, such as making consumers aware of the risks, as although there is limited direct evidence that this is required, the government is keen to limit consumer harms in the crypto and online advertising sphere.
At the same time, the government's position on utility or exchange tokens, such as Bitcoin, is that it remains unregulated for the meantime.
Overwhelmed
The creation of a senior role to lead a new directorate focused specifically on the crypto space indicates the FCA recognises this as an increasingly important area that requires resource and attention. This could be a significant step for the regulator, as there had been signs that it is struggling to keep up with the fast-moving crypto market.
The repeated desire in the job description to "lead a cross-sector crypto strategy to have a single FCA narrative on crypto” also suggests a deeper issue of internal disagreement about how the FCA should go about intervening in the crypto-asset sector, which a new head could resolve.
There have been many instances of crypto firms ignoring governance requirements, such as anti-money laundering registration. The regulator has already opened 300 cases related to unregistered crypto firms in the six months ending September 2021, and has added 172 firms to the FCA's list of unregistered crypto-asset businesses.
At a recent hearing of the UK House of Commons Treasury Select Committee in December 2021, committee members accused the FCA of a “lost focus on fintech”.
Specifically, there have been long delays for FCA authorisation for fintech firms of up to 11 months, with FCA CEO Nikhil Rathi admitting that 90 percent of anti-money laundering registration applications from crypto exchanges had been either refused or withdrawn.
Additionally, last year, the FCA had to extend its deadline for crypto firms' temporary permissions scheme to the end of March 2022.
In response to accusations of losing focus and long delays, Rathi said that the regulator was recruiting new people to help speed up the authorisation process. The role for head of department digital assets, as well as a new directorate is likely to be a key part of this redoubled focus.
