Regulation
UK faces potential ‘crypto catastrophe’ due to FCA staff shortage
The Financial Conduct Authority (FCA) has significantly expanded its cryptocurrency staff to more than 100, but its policy team remains understaffed, according to data obtained by blockchain financial services provider Quant through a Freedom of Information request.
The FCA now employs 109 cryptocurrency-focused staff, a huge increase from just 9 in 2019. However, only 18 of those staff 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 workforce is split between authorization (31 employees) and supervision (31 employees), focusing on granting regulatory approvals and monitoring conformity respectively. The political team, while growing from 11 members in 2023 to 18 in 2024, still lags behind other departments.
Gilbert Verdian, founder and CEO of Quant
“There is now widespread recognition that the unregulated cryptocurrency experiment has failed,” said Gilbert Verdian, founder and CEO of Quant. “But digital assets and tokenization improve many areas of financial services, the problem is that the UK does not have a body that can promote responsible and innovative regulation to govern all of this.”
The findings come as the new Labour government has pledged to “simplify regulatory regulation” as part of its Plan for Financial Services. The pledge puts pressure on the government to provide clearer regulatory guidance for the cryptocurrency sector or risk losing businesses to other jurisdictions.
“Properly regulated cryptocurrencies have the potential to transform our economy and financial services sector,” Tulip Siddiq, the new City minister, previously commented. Quant, however, argues that if just 18 employees were responsible for creating cryptocurrency regulations, the UK could be facing a “crypto catastrophe.”
FCA Needs a “Digital Finance Agency”
Notably, the data also highlights a significant resource gap in wholesale cryptocurrency policy, with only 9 staff in this crucial area. This shortage could pose a challenge to Labour’s stated aim of “embracing securities tokenization
and a central bank digital currency.”
Verdian suggests a possible solution: “A separate ‘Digital Finance Agency’, dedicated entirely to digital assets, could help the UK stay ahead of the curve when it comes to the future of finance.”
“Digital assets can bring major efficiency gains to wholesale financial markets and to realise this potential at scale, we need a new regulatory approach,” concluded Quant’s CEO.
The FCA noted that in addition to its dedicated cryptocurrency teams, it employs specialists within the organization who work on cryptocurrencies alongside other areas.
In February, the UK government announced its intention to implement the long-awaited Cryptocurrency regulation in the next six monthsSubsequently, in April, Economic Secretary Bim Afolami predicted that these regulations would be introduced by June or July. However, the industry is still waiting for their implementation. This development follows the passage of the Financial Services and Markets Act in June 2023which classified cryptocurrencies as regulated financial assets.
The Financial Conduct Authority (FCA) has significantly expanded its cryptocurrency staff to more than 100, but its policy team remains understaffed, according to data obtained by blockchain financial services provider Quant through a Freedom of Information request.
The FCA now employs 109 cryptocurrency-focused staff, a huge increase from just 9 in 2019. However, only 18 of those staff 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 workforce is split between authorization (31 employees) and supervision (31 employees), focusing on granting regulatory approvals and monitoring conformity respectively. The political team, while growing from 11 members in 2023 to 18 in 2024, still lags behind other departments.
Gilbert Verdian, founder and CEO of Quant
“There is now widespread recognition that the unregulated cryptocurrency experiment has failed,” said Gilbert Verdian, founder and CEO of Quant. “But digital assets and tokenization improve many areas of financial services, the problem is that the UK does not have a body that can promote responsible and innovative regulation to govern all of this.”
The findings come as the new Labour government has pledged to “simplify regulatory regulation” as part of its Plan for Financial Services. The pledge puts pressure on the government to provide clearer regulatory guidance for the cryptocurrency sector or risk losing businesses to other jurisdictions.
“Properly regulated cryptocurrencies have the potential to transform our economy and financial services sector,” Tulip Siddiq, the new City minister, previously commented. Quant, however, argues that if just 18 employees were responsible for creating cryptocurrency regulations, the UK could be facing a “crypto catastrophe.”
FCA Needs a “Digital Finance Agency”
Notably, the data also highlights a significant resource gap in wholesale cryptocurrency policy, with only 9 staff in this crucial area. This shortage could pose a challenge to Labour’s stated aim of “embracing securities tokenization
and a central bank digital currency.”
Verdian suggests a possible solution: “A separate ‘Digital Finance Agency’, dedicated entirely to digital assets, could help the UK stay ahead of the curve when it comes to the future of finance.”
“Digital assets can bring major efficiency gains to wholesale financial markets and to realise this potential at scale, we need a new regulatory approach,” concluded Quant’s CEO.
The FCA noted that in addition to its dedicated cryptocurrency teams, it employs specialists within the organization who work on cryptocurrencies alongside other areas.
In February, the UK government announced its intention to implement the long-awaited Cryptocurrency regulation in the next six monthsSubsequently, in April, Economic Secretary Bim Afolami predicted that these regulations would be introduced by June or July. However, the industry is still waiting for their implementation. This development follows the passage of the Financial Services and Markets Act in June 2023which classified cryptocurrencies as regulated financial assets.