November 26, 2018
by Sharon Moran
On November 26, The Telegraph reported that the number of inquiries into cryptocurrency-related businesses has doubled recently.
The Financial Conduct Authority (FCA) in response to a Freedom of Information request has indicated it has conducted inquiries into 50 firms. In the second quarter of this year, that number was only 24. The FCA has also indicated that they have received over a half dozen whistle-blowing reports from employees of cryptocurrency-related businesses.
These developments come just weeks after the 10th anniversary of Bitcoin’s creator, Satoshi Nakamoto’s publication of the Bitcoin whitepaper. In late 2008 and 2009, bitcoin was a fringe interest of anarcho capitalists, tech geeks, or cryptography enthusiasts. I was fortunate enough to be in the inner circle of one of these cryptography enthusiasts, and the intellectual discussions we had were always though-provoking and transformative.
As a result of the price increase from $2000 in May 2017 to $5000 in September, to $20,000 in December, the crypto space has attracted unethical individuals who have overnight suddenly become self-appointed blockchain experts. For example, earlier this year, the SEC charged Michael Stollaire, CEO of Titanium Blockchain Infrastructure Services, with securities fraud. The scam might have gone undetected if not for the list of companies pursuing cease and desist orders when the companies realized that Stollaire was claiming non-existent relationships with them and dozens of well-known companies.
The Telegraph also reported Andrew Jacobs, partner at accountancy firm, Moore Stephens, expected an increase in complaints to the FCA triggered by the decline in cryptocurrency prices. Despite the decline in cryptocurrency prices, progress in the cryptosphere is moving forward.