Regulation
UK faces potential ‘crypto catastrophe’ due to FCA staff shortages
The Financial Conduct Authority (FCA) has significantly expanded its cryptocurrency staff to more than 100 members, but its policy team remains understaffed, according to data obtained by blockchain finance provider Quant via a freedom of information request.
The FCA now employs 109 people dedicated to crypto assets, a significant increase from just nine in 2019. However, only 18 of these employees work in the policy department, which is responsible for drafting and implementing market regulations.
The data reveals that the majority of the FCA’s crypto staff are split between authorisation (31 employees) and supervision (31 employees), focusing on granting regulatory authorisations and oversight. compliance The political team, although increasing from 11 members in 2023 to 18 in 2024, remains behind other departments.
Gilbert Verdian, Founder and CEO of Quant
“It is now widely recognised that the unregulated crypto experiment has failed,” said Gilbert Verdian, founder and CEO of Quant. “While digital assets and tokenisation are improving many areas of financial services, the problem is that the UK lacks a body capable of driving forward responsible and innovative regulation to govern it all.”
The findings come as the new Labour government has pledged to “streamline regulation” as part of its Financial Services Plan. The commitment puts pressure on the government to provide clearer regulatory guidance for the cryptocurrency sector, or risk losing businesses to other jurisdictions.
“Properly regulated crypto assets have the potential to transform our economy and the financial services sector,” Tulip Siddiq, the new City minister, said earlier. Quant, however, argues that if just 18 staff are tasked with creating cryptocurrency regulations, the UK could face a “crypto catastrophe.”
FCA needs a ‘digital financial agency’
Notably, the data also highlights a significant lack of resources in crypto wholesale policy, with just 9 staff in this crucial area. This shortage could jeopardise Labour’s stated aim of “committing to security tokenization
and a central bank digital currency.
Verdian suggests a potential solution: “A separate ‘Digital Finance Agency’, dedicated entirely to digital assets, can help keep the UK ahead of the curve when it comes to the future of finance.”
“Digital assets can bring major efficiency benefits to wholesale financial markets and to realise this potential at scale we need a new regulatory approach,” Quant’s CEO concluded.
The FCA stressed that beyond its dedicated crypto teams, it employs specialists across the organisation who work on crypto assets alongside other sectors.
In February, the UK government announced plans to implement the much-anticipated Cryptocurrency Regulation in the Next Six Months. Subsequently, in April, Economic Secretary Bim Afolami predicted that these regulations would be introduced by June or July. However, the sector is still waiting for their implementation. This development follows the adoption of the Financial Services and Markets Act in June 2023which classified cryptocurrencies as regulated financial activities.
The Financial Conduct Authority (FCA) has significantly expanded its cryptocurrency staff to more than 100 members, but its policy team remains understaffed, according to data obtained by blockchain finance provider Quant via a freedom of information request.
The FCA now employs 109 people dedicated to crypto assets, a significant increase from just nine in 2019. However, only 18 of these employees work in the policy department, which is responsible for drafting and implementing market regulations.
The data reveals that the majority of the FCA’s crypto staff are split between authorisation (31 employees) and supervision (31 employees), focusing on granting regulatory authorisations and oversight. compliance The political team, although increasing from 11 members in 2023 to 18 in 2024, remains behind other departments.
Gilbert Verdian, Founder and CEO of Quant
“It is now widely recognised that the unregulated crypto experiment has failed,” said Gilbert Verdian, founder and CEO of Quant. “While digital assets and tokenisation are improving many areas of financial services, the problem is that the UK lacks a body capable of driving forward responsible and innovative regulation to govern it all.”
The findings come as the new Labour government has pledged to “streamline regulation” as part of its Financial Services Plan. The commitment puts pressure on the government to provide clearer regulatory guidance for the cryptocurrency sector, or risk losing businesses to other jurisdictions.
“Properly regulated crypto assets have the potential to transform our economy and the financial services sector,” Tulip Siddiq, the new City minister, said earlier. Quant, however, argues that if just 18 staff are tasked with creating cryptocurrency regulations, the UK could face a “crypto catastrophe.”
FCA needs a ‘digital financial agency’
Notably, the data also highlights a significant lack of resources in crypto wholesale policy, with just 9 staff in this crucial area. This shortage could jeopardise Labour’s stated aim of “committing to security tokenization
and a central bank digital currency.
Verdian suggests a potential solution: “A separate ‘Digital Finance Agency’, dedicated entirely to digital assets, can help keep the UK ahead of the curve when it comes to the future of finance.”
“Digital assets can bring major efficiency benefits to wholesale financial markets and to realise this potential at scale we need a new regulatory approach,” Quant’s CEO concluded.
The FCA stressed that beyond its dedicated crypto teams, it employs specialists across the organisation who work on crypto assets alongside other sectors.
In February, the UK government announced plans to implement the much-anticipated Cryptocurrency Regulation in the Next Six Months. Subsequently, in April, Economic Secretary Bim Afolami predicted that these regulations would be introduced by June or July. However, the sector is still waiting for their implementation. This development follows the adoption of the Financial Services and Markets Act in June 2023which classified cryptocurrencies as regulated financial activities.