After the FCA took the role of looking over crypto businesses for potential money laundering attempts back in 2020, it seems that only a few of the crypto firms have been able to proceed with their FCA Registrations of AML standard.
Registration Issues
According to multiple reports, the FCA hasn’t been showing any kindness towards crypto companies. The FCA has made it very difficult for the majority of cryptocurrency firms in the UK to receive an official FCA Registration based on the AML standard. UK Parliament member and secretary of the treasury, John Glen highlighted some of the issues regarding the registration process of FCA for crypto-based companies. Because of the difficult process of registration and approval, only five crypto companies have been able to secure an FCA registration of AML standard, which is just something that is hindering the potential of crypto in the UK.
Glen revealed that over 90% of the crypto-based firms in the UK have had to recall their registration applications because of the FCA. According to stats, there are at least 167 crypto businesses that have registered with great applications with around 77 companies that are still waiting for their applications to be fully accessed and approved.
The issue that was stopping the FCA from approving the majority of the applications was that the companies had reportedly failed to integrate the proper and secure AML control frameworks into their systems, meanwhile also failing to hire the appropriate staff members. As of now, the FCA has come up with a way to temporarily register which will allow these crypto companies to trade till the 9th of July until a proper, formal decision is made.
Balance and Competition
John Glen also mentioned that the Treasury has been in regular talks with the FCA regarding the problems over financial services provided by these crypto firms. The Treasure posted a note which stated that any of the regulatory regimes set by the government will help to balance consumer risks and will also focus on increasing competition in the industry, meanwhile promoting innovations as well.
The FCA has been constantly working to improve the situation around the operations of crypto firms. The FCA has made plans that will require all crypto companies to submit financial crime reports on a yearly basis, which will help in figuring out better solutions.