2018-6-12 05:55 |
The UK’s Financial Conduct Authority (FCA) has issued guidance for banks on how to handle the risks associated with “crypto assets”, according to a letter posted on the FCA’s website June 11.
Per the statement issued by Executive Directors of Supervision Jonathan Davidson and Megan Butler, banks should apply a highly individual approach to clients dealing with crypto assets since “the risk associated with different business relationships in a single broad category can vary.” The statement continues: “Following a risk-based approach does not mean banks should approach all clients operating in these activities in the same way.
In the statement, the financial regulator also stressed the non-criminal motives for using cryptocurrencies, including funding “innovative technological development” and high-risk “speculative investments.” However, taking into account the globality and anonymity of crypto, the FCA suggested a couple of “high-risk” indicators, such as clients using a state-issued cryptocurrency and possessing large amounts of initial coin offering (ICO) tokens.
In April, the Central Bank of Kenya (CBK) issued a similar warning to the banks in the country, warning them against providing services to crypto dealers.
CBK Governor Patrick Njoroge said, “There are risks associated with cryptocurrency particularly on consumer protection, fraud, hacking and loss of data and they are prone to be used as pyramid scheme.”
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