One of the most important aspects in the further expansion of the crypto market:
A large number of crypto companies have failed to meet the UK Financial Regulatory Authority’s rules regarding anti-money laundering and anti-terrorist financing regulation.
51 companies withdrew their orders, affecting their ability to trade.
The FCA has extended the initial deadline for crypto companies to register and comply with regulation, and accordingly the registration schedule has been extended from July 9 to March 2022.
Currently only five companies are registered and are fully compliant with FCA regulations at the time of writing, with 90 crypto companies currently operating under temporary registration rules that were due to expire in July.
This has led to an unprecedented number of companies withdrawing their apps.
The extended history allows crypto companies to continue their business while the Financial Conduct Authority (FCA) continues its evaluation.
The UK’s Financial Conduct Authority was keen to reiterate that even if a company is registered with it, this does not necessarily mean that clients will be protected under the Financial Services Compensation Scheme, or have access to the Financial Ombudsman service.
Adam Holden, CEO of NorthRow, commented that the crypto industry should take this regulation seriously, stating:
Until the cryptocurrency industry takes its regulatory responsibilities seriously, it will continue to attract criticism and will not be able to realize its full potential.
With eight months to achieve compliance, they need to take action today.
All UK firms offering cryptocurrency-related services are required to register with the FCA, but with only five currently registered, a number of crypto firms are reluctant to register if this will affect their ability to trade.
The extension provided by the FCA gives crypto companies a space to ensure their compliance before they are registered, which in turn increases the volume of regulated applications.
Like most other countries, the UK has not yet introduced a comprehensive regulatory status for cryptocurrencies and crypto companies.
However, the FCA requires all crypto companies to register and meet strict anti-money laundering and terrorist financing regulations.
Last year, the FCA made a decision to ban futures contracts for cryptocurrency and exchange-traded securities, after raising concerns about retail investors being exposed to significant losses and volatility.
Recently, Bank of England Governor Andrew Bailey showed his less optimistic stance regarding cryptocurrencies, stating last month that cryptocurrencies have no intrinsic value and should only be bought if one is prepared to lose all of their money.