Less than a week after the Department of Justice announced a probe into Bitcoin price fixing, the Financial Conduct Authority (FCA) in Britain has reported it is investigating 24 blockchain-related businesses in its jurisdiction. On the 25th of May, the FCA reported its decision to the Financial Times. The information was released after a consultancy firm filed a Freedom of Information Request. The FCA is not the only authority looking into cryptocurrency, and the Treasury Committee has also launched an inquiry.
Similar probes are ongoing in the USA, with the SEC launching some investigations. The regulatory authority of the FCA over cryptocurrencies is similar to that of the SEC. Neither agency is the official regulator of cryptocurrency. However, there are numerous grey areas. The FCA claims to have jurisdiction over cryptocurrency derivatives, and there are many question marks over ICOs. Some tokens can be deemed securities, and the investment model itself is questionable, with many hacks and scams. The SEC has always maintained the right to investigate cryptocurrencies in certain instances.
It appears that the regulatory floodgates have opened up. The USA and Britain have a lot of catching up to do in being brought up to speed with Japan, Russia, and the Baltic States, who are far ahead of the vast majority of other countries. Both countries are possibly the last to be brought aboard but have considerable financial firepower to throw at blockchain technology.
It is quite possible that soon the green light will be given for institutional investment, the type of money that will dwarf previous exposure. There are numerous indicators. Coinbase recently opened a suite of products aimed at institutional investors, and Barclays has opened up a Coinbase account. Even Goldman Sachs is opening a cryptocurrency trading desk, and the SEC unexpectedly created a fake ICO website to educate investors.
Furthermore, John McAfee recently tweeted that institutional investors are preparing to get involved in cryptocurrency trading. Though he is known for his controversial tweets, there is a lot of evidence pointing to the fact that the West is no longer turning a blind eye to cryptocurrency. We could well see massive money flow into the market in the next six months. Before we do, these types of probes must clear the way.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.