Will The FCA Seize Client Assets From Unregistered Crypto Exchanges?

Last month, the FCA announced the arrest of two people suspected of running an illegal cryptoasset exchange business. The suspects were interviewed under caution, and their digital devices seized, before being released on bail pending an investigation.

The FCA, working with the Metropolitan Police Service, is investigating the business for allegedly buying and selling cryptoassets, which are believed to be worth more than £1 billion, without having registered for anti-money laundering (AML) regulations purposes.

This announcement should act as a reminder to investors and investment managers using crypto exchanges in the UK to carry out appropriate due diligence on who they are doing business with, as failure to do so could not only result in the loss of assets to bad actors but also, as this development shows, the FCA and other enforcement agencies potentially seizing their cryptoassets.