The crypto market is yet to recover from the early May crash. Despite this, another bear market seems to be on the horizon with the hard line UK regulators are taking against crypto exchanges. Notices have been issued to exchanges in the UK who have failed to meet the Know Your Customer and Anti-money Laundering requirements. This may instigate a dwindling interest in crypto buying in the country.
There has been a considerable increase in crypto buying lately in the country in contrast with last year’s figure. The number of UK adult crypto holdings in 2020 stood at 1.9 million. However, with the awareness cryptocurrencies are gaining in the country, this has seen the figure increase to 2.3 million.
Some crypto exchanges are unable to meet the requirements set by the UK regulators as they also have to be bothered about overregulation. The KYC/AML requirements impose an obligation on exchanges to report suspicious transactions on their platforms. However, decentralization remains a core feature of cryptocurrencies. As such, this obligation would be difficult to fulfill.
The interest in crypto buying may likely reduce in the country as UK regulators have threatened to impose fines or initiate legal actions against unregistered crypto exchanges if they fail to cease operations.
Will Interest in Cryptocurrencies Decline?
Reports indicate that UK investors prefer investing in crypto rather than stocks or shares. Although UK regulators have warned against the risks and volatility involved. However, as the attempts at overregulation continue, crypto exchanges may be forced to bar UK investors from accessing their services.
China’s harsh policy on crypto mining in the Sichuan Province caused the prices of cryptocurrencies to crumble last week. Following regulatory attempts in the UK, crypto investors may have to brace themselves for another market downturn.