First ever sentencing in UK for crypto ATM fraud, concerns over poor safeguarding practices, plus a new appointment at FSCS.
Enforcement
Olumide Osunkoya, the first person to have been charged with crypto ATM fraud in the UK, has pleaded guilty to five offences at hearing at Westminster Magistrates’ Court.
This will now be the first UK conviction of its kind for offences relating to the operation of crypto ATMs, the FCA has said in a press release.
We had previously reported Mr. Osunkoya’s being charged for running a network of crypto ATM in the UK without proper FCA registration.
The regulator’s press release has now also confirmed he will be sentenced for “creating and using false documents, and for possession of criminal property.”
It says, “He [Olumide Osunkoya] continued to operate and grow the crypto ATM network in local convenience shops across the UK despite being refused for registration with the FCA in 2021. Mr Osunkoya completed no customer due diligence or source of funds checks on those who used the crypto ATMs.”
He will now be sentenced formally at Southwark Crown Court. The date for the sentencing is yet to be confirmed.
Rules and consultations
The FCA has once again extended the pause to the deadline for motor finance firms to provide a final response to customer complaints regarding discretionary commission arrangements (DCAs). The deadline is now 4 December 2025.
The regulator has said in a statement that one of the reasons for the extension was it had taken longer than expected for firms to provide the FCA with the required data in this regard.
It is also weighting the results of a judicial review by Barclays Partner Finance into the Financial Ombudsman Service’s decision to uphold a complaint relating to its use of a DCA.
The FCA statement says, “The extended pause allows us time, if necessary, to introduce an alternative way of dealing with DCA complaints, such as a consumer redress scheme. It is too early to say if we will intervene in this way, but based on our work so far, it is more likely than when we started our review.”
Consumers can still refer a DCA complaint to the Financial Ombudsman “until the later of 29 July 2026 or 15 months from the date of their final response letter from the firm.”
Elsewhere, the FCA has shown concern about the poor safeguarding practices by payment and e-money firms, despite the fact that their use has increased in recent years.
The regulator has said in a press release the fact that funds are kept by firms themselves and not by a Financial Services Compensation Scheme (FSCS) means customers can either lose money or see delays in refunds if the firms go out of business.
The FCA is now consulting with firms on proposals under which “the existing e-money safeguarding regime will be replaced with a client assets (CASS) style regime designed to work with payments firms’ business models. It will also publish strengthened interim safeguarding rules for firms by the middle of next year.” Some commentators are concerned about the compliance burden associated with the changes.
Firms have until 17 December 2024 to respond to the consultation.
Media and speeches
The FCA’s joint executive director of enforcement and market oversight, Therese Chambers, delivered a speech at AFME Annual European Compliance and Legal Conference last week, which GRIP covered in more detail. Some key points from her remarks were:
- The regulator is adapting our approach to enforcement to meet evolving threats and maximise the deterrent effect.
- It is listening to industry feedback on its ‘name and shame’ plans.
- Its intention is to make investigations faster and more focused to nip financial crime in the bud and send timely signals to markets and consumers.
- Enforcement is just one of the tools – industry cooperation, assertive supervision and intervention powers are also key in dealing with harm.
Also last week, FCA’s executive director, markets and executive director, international, Sarah Pritchard, delivered a speech at the FT Financial Advice Forum in London. Here are some of the highlights from her speech.
- There is currently a unique opportunity to do things differently and re-draw regulations for better outcomes for both consumers and firms.
- This will require open conversations on risk, and the FCA is listening to stakeholder feedback.
- Firms should act now, embracing data and digital to innovate and meet the needs of their consumers.
The FCA has announced that, together with the BoE, it has opened the Digital Securities Sandbox and is encouraging firms that are innovating in financial market infrastructure to apply. The regulators have published guidance to help firms with the process.
According to the regulator, “The DSS gives firms the opportunity to explore new technologies in traditional financial markets, for example, distributed ledger technology (DLT), a system for storing and managing information distributed across participants in a network.”
The regulator says the DSS has a number of benefits including:
- Improving efficiency and reducing costs in wholesale markets
- Delivering regulatory changes in a faster and more effective way
- Supporting innovation and protecting financial stability
And finally, The FCA and the PRA have appointed Elizabeth Passey as Chair of the Financial Services Compensation Scheme’s (FSCS) board, the regulator has announced in a press release.
She took up the new role on 1 October 2024.
The FCA said that previously “Elizabeth held senior positions with J Stern & Company, Investec Asset Management and Morgan Stanley.”