UK financial watchdog warns consumers over Kraken clone

The Financial Conduct Authority has warned that scammers are impersonating the UK business of leading crypto exchange Kraken, Crypto Facilities.

In a statement on its website, the regulator said the unauthorised clone firm is going under the name of Cryptos Bank.

The City watchdog has warned people to be extra vigilant to the threat of investment scammers after victims lost over £78 million in 2020 – £45,000 each on average. As such, the FCA has urged investors to check its register before doing business with any investment platform.

In some cases, victims of clone firm scams, where a fake company uses the details of a regulated business, will have used a genuine price comparison website before being targeted.

Kraken’s UK subsidiary, Crypto Facilities, already holds authorisation from the UK Financial Conduct Authority to operate a multilateral trading facility (MTF). The San Francisco-based cryptocurrency exchange is also seeking approval to operate in Europe by the end of 2021.

Just seven cryptocurrency-related companies are currently registered with Britain’s financial regulator. However, there are dozens of other crypto firms registered under the Temporary Registration Regime list.

Since January 2020, the Financial Conduct Authority has been tasked with overseeing Anti-Money Laundering compliance for the UK’s crypto sector. At the time, the FCA kicked off a registration scheme for crypto-asset firms with an initial deadline of one year.

Amid a backlog of licensing applications, the FCA has extended its temporary licensing regime until March 2022 for firms whose applications haven’t yet been approved to allow them to continue trading.

However, nearly 70 crypto businesses had withdrawn earlier submitted filings for registration as the country tightens its regulation on the space. By retracting their applications, these firms had to cease operation in the UK, though dozens are still being assessed by the FCA.

Most recently, the authority said Binance was not permitted to conduct regulatory operations in the UK. But the City watchdog reiterated its previous warning against the world’s biggest crypto exchange and said Binance Markets Limited, the UK division of Binance, has complied with all the requirements imposed by the FCA.