FCA gives UK crypto eight months to get its anti-money laundering measures in-order

By Oliver Smith on Friday 4 June 2021

Digital Banking

Just five crypto firms have managed to comply with the FCA’s rules so far.

FCA gives UK crypto eight months to get its anti-money laundering measures in-order
Image source: Freddie Collins/Unsplash.

The deadline for UK cryptoasset firms to fully register and comply with the Financial Conduct Authority’s rules has been pushed back to March 2022 after the regulator said many applicants are still failing to comply.

A “significantly high number” of cryptoasset firms are still not meeting the regulations around anti-money laundering and counter-terrorist financing, the FCA said yesterday.

“This has resulted in an unprecedented number of businesses withdrawing their applications,” the regulator wrote.

“The extended date allows cryptoasset firms to continue to carry on business while the FCA continues with its robust assessment.”

51 companies have withdrawn their applications, meaning they can no longer trade.

Currently, just five firms are registered with the FCA, with 90 operating under the temporary registration rules which were due to end on 9 July before yesterday’s extension was announced.

“Until the crypto industry takes its regulatory responsibilities seriously, it will continue to attract criticism and be unable to reach its full potential. With eight months to achieve compliance, they need to be taking action today,” said Adam Holden, CEO of compliance group NorthRow.

The FCA emphasised that even if a firm is registered with it, that doesn’t mean its customers will have access to the Financial Ombudsman Service or Financial Services Compensation Scheme.

“Cryptoassets are considered very high risk, speculative investments. If consumers invest in cryptoassets, they should be prepared to lose all their money.”

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