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Two people arrested on suspicion of running a £1 billion illegal cryptocurrency exchange
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Police have arrested two people suspected of running an illegal cryptocurrency exchange which was trading cryptocurrencies worth more than £1 billion.
Two people, aged 38 and 44, had theirs London offices searched by Financial Conduct Authority (FCA), while the Metropolitan Police seized several digital devices during searches carried out in two residential properties in the capital.
Both suspects were questioned under caution by the FCA and released on bail. The authority’s investigation into the case is ongoing.
The FCA has an important role to play in keeping dirty money out of the UK financial system. These arrests show that we will do everything in our power to stop crypto companies from operating illegally in the UK
Therese Chambers, FCA
More than £1 billion of unregistered cryptocurrencies are believed to have been bought and sold through the firm, the regulator said.
Therese Chambers, executive director of enforcement and market oversight at the FCA, said: “The FCA has an important role to play in keeping dirty money out of the UK financial system.
“These arrests show that we will do everything in our power to stop cryptocurrency companies from operating illegally in the UK.”
This comes after a recent global crackdown on crypto companies, following the collapse of several industry giants that led to millions of people losing money they had invested in cryptocurrencies such as bitcoin and ethereum.
The most high-profile was the implosion of FTX, the cryptocurrency exchange run by Sam Bankman-Fried, which saw the tycoon sentenced to 25 years in prison in the United States for defrauding customers and investors.
Meanwhile, Changpeng “CZ” Zhao, the founder of cryptocurrency exchange Binance, was sentenced to four months in prison in April for allowing criminals to launder money on his platform.
Mr. Zhao resigned from Binance in November. He pleaded guilty to violating US money laundering laws.
Binance is still operational and remains the largest cryptocurrency exchange in the world by transaction volume.
The FCA has a register of so-called authorized crypto firms that are allowed to operate from the UK.
This includes crypto spin-offs created by financial giants such as Fidelity, Standard Chartered and Japanese investment bank Nomura.
The regulator also forces registered cryptocurrency companies to demonstrate that they comply with UK money laundering regulations in order to operate legally.
According to intelligence firm Chainalysis, cryptocurrency-related crime amounted to more than US$24 billion (£19 billion) last year.
The list of authorized crypto companies is number 45.
Meanwhile, a separate FCA list of crypto firms suspected of operating illegally in the UK includes more than 13,000 firms.