The UK Financial Conduct Authority (FCA) has issued guidance for banks with recommendations for minimizing the risks accompanying with bitcoin and other cryptocurrency assets.
The FCA announcement includes statements by Jonathan Davidson and Megan Butler, Executive Directors for Supervision, according to which banks should apply a highly individual approach to customers working with crypto assets, since “the risk associated with different operations of the same category may vary”.
“A risk-based approach does not mean that banks should approach all customers performing the same activity in the same way. Instead, we expect banks to recognize that the risk associated with various business transactions in one category may vary, and will manage these risks accordingly.”
Thus, the regulator proposed a number of “good” measures that banks should take to minimize risks from customers using crypto-loans for “criminal purposes”. FCA called on banks to raise awareness of employees in the field of crypto assets in order to understand the nature of the business of clients who work with them and to correctly identify the risks that arise in this case.
As noted by FCA, the risk of using crypto currency, which the state emits, is that it is “designed to evade international financial sanctions.” Given the risks associated with the ICO, the regulator said that this practice implies “an increased risk of becoming a victim of investment fraud.”
At the end of December 2017, when bitcoin reached record prices, FCA warned investors about the risks of losing its assets, saying that bitcoin is a bubble and a “strange” commodity.