The FCA is concerned younger crypto holders will behave "less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers."
On Friday, Japan’s financial regulator warned that Binance is operating in that country without permission.
The FCA is warning consumers, banks and payment services about dealing with unregistered crypto-asset firms.
The firm was identified as using details of the legitimate company, Swiss Re Capital Markets.
The FCA has expressed concern that a "significantly high number" of crypto-asset businesses are not meeting its standards on AML.
The “clone” firm has been emailing and cold-calling investors and using the real company’s Firm Reference Number with a fake name, the regulator said.
The new FCA policy will see the number of companies required to submit financial crime reports increase from 2,500 to 7,000.
The crypto-friendly firm will use this pause to strengthen its anti-money laundering controls.
These young investors "skew more towards being female, under 40 and from a BAME background," the regulator said.
Only four out of 200 crypto businesses' applications to the FCA's Money Laundering Registration regime have seen a decision, said CryptoUK.
Bybit said it will no longer be providing its services following the Financial Conduct Authority’s (FCA) ban on crypto derivatives.
The firm said it has now reached its internal product limit for exposure to cryptocurrencies after an FCA ban on crypto derivatives in January.
The Financial Conduct Authority said investors in cryptocurrency products offering high returns should be prepared to lose "all their money."