The UK’s Financial Conduct Authority (FCA) has been facing criticism from crypto firms that have failed to secure approval from the regulator.
The FCA has been requiring all crypto exchanges and custody providers operating in the UK to register with the FCA and comply with its anti-money laundering (AML) rules to serve UK clients.
However, of the 300 applications the FCA received, only 41 have been approved so far. Many firms have either had to shut down or move their business abroad due to the FCA’s stringent requirements.
Crypto companies are struggling to get approval from the Financial Conduct Authority (FCA), with many reporting long wait times, a lack of feedback, and what they describe as unfair treatment by the regulator.
The FCA, however, claims that many firms failed to provide sufficient evidence of robust anti-money laundering (AML) and anti-terrorist financing systems, leading to their applications being rejected. The regulator has also published tips and advice on its website to help companies win its approval.
Despite the FCA’s efforts to crackdown on crypto companies that have moved abroad, some are still providing services to UK customers. This suggests that these companies would prefer to operate in a more relaxed regulatory environment, rather than comply with the FCA’s strict requirements.
Chair of the cross-party parliamentary group for crypto in the UK, Lisa Cameron, has reportedly said that some companies have “given up in the process and gone elsewhere”.
As if things weren’t already tough enough for crypto companies, the UK government has proposed new rules that would make it mandatory for companies to be registered and set up locally if they wish to serve UK customers.
The proposed rules, which are open for public comment until April, would also require firms to apply for new authorization and undergo more thorough checks. This could be a real game changer for the industry, as it would make it much harder for companies to operate in the UK. It will be interesting to see how the crypto community responds to these new proposals.
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