Crypto Regulation in the UK: A Rocky Road
The UK’s financial watchdog, the Financial Conduct Authority (FCA), has been cracking down on crypto firms, resulting in a high failure rate for registration applications.
A Tough Approval Process
The FCA has only approved 47 out of 340 crypto firm applications since January 2020, giving them a dismal 14% approval rate. This translates to an 87% failure rate over the past year alone.
- The FCA cites weak anti-money laundering (AML) procedures as the main reason for the high failure rate.
- Many applications were incomplete or lacked essential information.
- The FCA emphasizes the importance of financial security and the need to enforce AML regulations, despite the absence of specific crypto regulations in the UK.
Frustration and Delays
Crypto companies are frustrated with the long registration process, which can take an average of 459 days. They also complain about delays in receiving feedback from the FCA.
Crypto Firms Moving On
The strict regulations and lengthy delays have led many crypto firms to withdraw their applications or choose to operate outside the UK while still serving UK clients. This has resulted in a 51% decrease in new crypto firm applications over the past three years.
The Future of Crypto Regulation in the UK
The current UK government has halted plans for crypto-specific regulations, leaving the future of crypto regulation in the UK uncertain. The FCA’s focus on AML compliance and the difficulties faced by crypto firms seeking registration suggest a cautious approach to crypto regulation in the UK.
