Cost of crypto regulation

Article by Phil

The FCA has announced that it will need an additional £8 million in funding in order to regulate crypto firms going forwards. Of course, that does not mean that cryptocurrencies are about to fall under the protection of the regulator. It just means that FCA is now taking responsibility for regulating crypto firms’ compliance with money laundering regulations.

There are around 50 authorised crypto traders at the moment, so the FCA has decided that it would be too expensive for them to pay the bill and so it will be added to the regulatory costs of financial advice firms like ours, adding up to £1000 a year onto our bill. This is not especially welcome since our regulatory costs are now expected to increase by over 5.5% this year. It is now likely to cost us almost £1000 in regulatory costs for every couple we advise.

That seems like a lot doesn’t it?

Unfortunately, those costs have to be borne by you, our clients as part of the overall advice fee. Add to that a similar amount for Professional Indemnity Insurance and you can start to see why the cost of financial advice is increasing year on year.

Meanwhile the regulator has not offered any detailed explanation of the costs breakdown of the £8 million required to regulate just 50 firms for money laundering. That’s a cost of £160,000 per firm. It seems most of the money will be spent on new computer systems.

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