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As Bitcoin and other cryptocurrencies gained fame in 2017, more and more people invested into them. The promise of instant profits and wealth was able to pull in billions of dollars of investments without ever really explaining how the system worked. However, merely weeks after reaching its peak price, Bitcoin and other cryptocurrencies plummeted, recording the biggest drop in their values in years, and investors lost millions of dollars.
Throughout 2018, crypto assets struggled to regain their value. Today, Bitcoin is priced at a little under $4,000. This story raised concerns across the world that cryptocurrencies lacked the necessary oversight to protect the public from fraud and deceit.
This is probably why in recent months, city watchdog in the U.K. has increased its scrutiny against companies dealing in cryptocurrencies in general and Bitcoin in specific. The Telegraph reports that the watchdog is currently investigating 18 companies that have connections to crypto-related transactions. The move comes after concerns have been raised regarding the threat posed by digital assets to financial markets. Claims have also been raised that majority shareholders of big cryptocurrency chains orchestrated the January 2018 fall of cryptocurrencies.
The Telegraph obtained the information through the freedom of information laws. The information reveals that FCA or the Financial Conduct Authority said that as of Nov 12, inquiries had been opened against 67 firms that were involved in cryptocurrency transactions and businesses.
As reported by The Telegraph, out of 49 inquiries that have already been closed, nearly four out of every five investigations triggered warnings to the public about the companies. However, the FCA refused to reveal the names of the companies that were still under investigation.
The executive director of strategy and competition at the authority, Christopher Woolard warned that crypto assets posed potential harm to consumers and market integrity in the U.K. He also said that HM Treasury, FCA and the Bank of England would all be taking steps in the coming months to provide better oversight and address the threat posed by crypto assets. He also said that the steps taken by these institutions will encourage beneficial innovation in the new technology.