News

UK Cryptos Have Eight Months to Get their AML Measures In Order – FCA

  • Richard Marley
  • June 04, 2021
  • 2 minutes read
  • 174
blog_image

UK – The Financial Conduct Authority (FCA) has pushed back the end date of crypto company’s temporary registration to March 2022 from July 2021. 

The TRR, abbreviated for Temporary Registrations Regime, was devised last year to provide crypto businesses with the chance to trade while their registration status was still being reviewed by the FCA. According to the new announcement, any crypto company that applied for registration prior to December 16, 2020, has a temporary registration status until March 31, 2022. 

Once the FCA became the supervisor of AML (Anti-money Laundering) and CFT (Counter Financing of Terrorism) measures for crypto companies in the UK, it made compliance with AML regulations mandatory for cryptocurrency firms. 

However, as site visits became restricted due to the COVID-19 pandemic, along with the lagging standards of the applications received, the FCA informed the TRR and was moved to announce temporary registrations to all businesses that had submitted applications prior to December 16. The initial ending date for the TRR was set for the 9th of July. 

A “significantly high number” of crypto-asset firms are still not meeting mandatory AML and CFT standards, the FCA stated yesterday.

According to current statistics, only five firms have been registered with the FCA, while 90 companies are operating under the TRR rule. 

It should be noted that temporary registrations are, however, restricted to only the businesses that were active before January 10, 2020. According to the FCA, new companies require full registration to continue trading. 

Due to substandard AML compliance standards, numerous crypto businesses withdrew their applications. The extended date was announced to provide some relief, enabling businesses to continue trading while the FCA continues its robust assessments. 

This step became necessary, given that 51 companies withdrew their applications, meaning they could no longer trade.

The FCA’s announcement reinforces the risks related to money laundering when it comes to crypto assets. It also shines a spotlight on the importance of having sufficient AML compliance controls. Earlier this year, the financial regulator issued a warning for crypto enthusiasts when Bitcoin slipped below $33,000, stressing that investors should prepare themselves to lose all their money. 

Suggested Read: FCA Bans Crypto-Related Investments in the UK