Crypto Firms Face Critical Deadline in UK

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Crypto firms in the UK could be forced to shut down by next week as the deadline for registering with a leading financial regulator in the country looms.

UK crypto firms have March 31 deadline

According to an CNBC report, the Financial Conduct Authority (FCA), in new efforts To fight crypto crime in the country, it has set a March 31 deadline for companies offering crypto services to register.

The regulator had previously extended the deadline by allowing companies on the temporary registry to continue operating in the country even if they apply for a full license. However, only 33 uses, including: twinhave been approved.

On the other hand, crypto companies like: revolution and Copper, which are on the temporary registry, have failed to meet the full authorization requirements, leading to the withdrawal or rejection of their applications.

Now they only have a few days to meet anti-money laundering standards or they may not be able to operate in the country.

CryptoSlate spoke with Jeff Hancock, CEO of Coinpass, who has experienced firsthand the trials and tribulations of ensuring that its UK-based exchange complies with the FCA’s governance. Handcock noted:

“The FCA process of complying with crypto asset companies was a blurred line and very difficult to cross. Not all companies were measured to the same standards, depending on their size, complexity, tokens offered, business models, and how they approached customer risk and suitability. While we agree that compliance is important, we are asked to assess our client’s suitability to trade crypto without the proper frameworks and guidance. It’s like being asked to walk through a minefield and reporting back with a missing limb.”

FCAs Lethargy Affecting Registrations

While the FCA is committed to: maintain high standards for crypto firms in the country, many are wondering how the agency managed the registrations.

Some have said that the regulator’s lethargy in handling applications has played a role in the current situation.

Speaking about the slow pace at which registration was being handled, Global Digital Finance’s Lavan Thasarathakumar stated that the regulator was dealing with a backlog of applications before adding that the process was also “really frustrating”.

Handcock provides insight into the aim:

“The process also diverged from Know Your Customer (KYC) and Anti-Money Laundering (AML) by asking for business cases and continuity plans related to our team size, marketing, margin compression and future industries. The process has been long, frustrating and will ultimately do little to protect investors in the UK as offshore exchanges continue to do what they want while hindering UK Fintech and Crypto innovation.

According to an FCA spokesperson for the FCA, some companies applying for the registrations do not meet the required standards that could help them identify illicit funds.

He added that companies whose applications have been rejected can appeal the decisions through the regulator or by going to court.

What this means for industry in the UK?

While the crypto industry is one of the fastest-growing spaces in the world, the advent of the new registration criteria by the FCA could affect the space as companies unable to complete their registrations may be forced to relocate their operations abroad.

Mauricio Magaldi of 11:FS believes that the UK crypto industry risks falling behind its peers in the US and Europe if the regulator were to continue with its current regulator’s stance.

According to Magaldi, the FCA “rules and timelines create hurdles for crypto firms that could potentially push them out of the UK market,” while also adding that the regulator also focused on the risks in the space rather than identifying the opportunities as well. .

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Posted in: UK, Regulation

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