FCA Hints Why only 15% of Crypto Firms Received Regulatory Approval
The UK financial watchdog has approved only 41 registration applications of crypto firms out of 300 applicants.
Despite all the programs to turn the region into a crypto hub, UK’s FCA (Financial Conduct Authority) has only cleared 41 registration out of 300 crypto firms seeking regulatory approval to operate.
The UK watchdog implemented new crypto-focused regulations on 10th January 2020 just to supervise the existing firms operating in the sector to ensure AML (Anti-Money Laundering) and CTF (Counter-terrorism Financing) compliance in traditional financial markets.
A statement from FCA has revealed that out of 265 applications that were “determined” only 15% of applications were approved by the authority, 74% of firms either refused or withdrew the application, while the 11% were rejected. Other 35 applications are yet to be analysed and determined.
While the FCA did not mention the actual cause of rejecting the licensing, it did provide feedback on “good and poor quality” applications.
Incomplete applications were more apparent when the firms used these to promote their products and services, particularly in cases when the application process was still ongoing.
“Applicants’ websites and marketing material must not include language that gives the impression that making an application for registration is a form of endorsement or recommendation by the FCA.”
The reports suggest that some firms have had their applications scrapped if they couldn’t show reliable operations sufficient enough to comply with regulatory protocols. The FCA also doubled its AML stance, demanding that all firms appoint a money laundering reporting officer who is “fully involved” in the application process.
The UK’s watchdog also stressed that even firms that had their registrations approved do not mean they are free from obligations.
“Applicants must recognize that being registered is not a one-off formality or a tick-box exercise without any further obligations or interaction with the FCA.”
“This feedback should help applicants when they prepare their application for registration and help make the process as simple and efficient as possible,” the note summarised.
Firms registered under the FCA thus far include Crypto.com, Revolut, CEX.IO, eToro, Wintermute Trading, DRW Global Markets, Copper, Globalblock, Moneybrain, and Zodia Markets.
Suggested Read:
FCA Fines Gatehouse Bank £1.58mn for Breaching Money Laundering Regulations
FCA Fines Santander and Metro Bank for AML Compliance Gaps
FCA Fines Nigeria’s Guaranty Trust Bank Over AML Control Failures
