The UK Officially Registers Cryptocurrency Companies
Cryptocurrency companies in the United Kingdom have been popping up regularly in recent years. This is because digital currencies have become the way for many to invest without much government regulation. However, the regulations from the FCA concerning crypto companies, leave many of these companies wondering about their fate.
After the FCA, or Financial Conduct Authority, in the UK released guidelines for cryptocurrency companies, this left many scrambling to acquire the credentials required to operate. With the extension of the regulation requirements ending recently, only five companies have been granted temporary registration.
Knowing who the FCA is and why the regulations are being put in place for crypto companies will help you to understand why many of these companies are frustrated with the process. Keep reading to learn more about the fate of cryptocurrency companies in the UK.
What Is the FCA?
The Financial Conduct Authority or FCA is a government body in the UK that regulates and oversees certain aspects of the financial services in the country. Their main purpose is to ensure that safe practices are followed when it comes to anything financial.
More specifically, the FCA keeps track of various companies that do business, especially in the digital realm. This governing body focuses on ensuring that customers and other stakeholders are not participating in or victims of money laundering or other fraudulent activities.
The FCA was tasked by the UK government to oversee certain compliance with the Anti-Money Laundering and the Combatting of the Financing of Terrorism laws that were passed. As a part of this, digital assets are a real threat to both of these areas.
Regulatory Mandate By the FCA
The FCA has required all cryptocurrency companies to register with them which requires certain guidelines to be met and followed. Many of these companies were not compliant with many of the regulations and therefore could not be quickly approved.
In 2021, the FCA extended the deadline for crypto companies who wanted to stay in business and would make the appropriate changes in their practices. The deadline was extended to the end of March of 2022, to give those companies time to meet standards.
Throughout this time, however, the process of approving companies has been somewhat slow with all of the businesses seeking registration. With this and the regulations themselves, many companies have chosen not to follow through with getting their registration for one reason or another.
Why Is There a Need For Regulation of Cryptocurrency Companies?
The need for certain regulations is necessary for UK companies to be registered with the FCA comes with the fear of money laundering and other fraudulent activities. Since cryptocurrency is a digital asset, there is always the uncertainty that hackers will find a way to take advantage of consumers.
Even though digital assets such as crypto are meant to be unregulated by governments, there is always the concern that the currency could be used for nefarious purposes and activities. With the FCA’s regulations, every company that deals in cryptocurrency will put certain protections in place to ensure the safety of its clientele.
Keep in mind that this is a response to the Anti-Money Laundering and Combatting the Financing of Terrorism mandates that protect the citizens of the country. The UK is not the only country to require certain regulations and registration for cryptocurrency companies.
Crypto Companies Registered
After the original deadline to be compliant with the FCA was extended in 2021, companies were allowed to conduct their business as long as they were actively making strides to get in compliance. The extended deadline of the end of March of 2022 included the various companies submitting their registration applications.
During this time, there were more than 30 of these businesses were approved through the FCA to be fully registered. Of the remaining, all but 5 companies withdrew their applications for various reasons.
Some of the companies that withdrew their applications did so either because of the strict guidelines they would be subjected to, or because the process was taking an incredibly long time. Many of those companies chose to conduct their business in other countries.
The 5 companies that submitted their applications were recently permitted temporary registration to continue to conduct business as usual. The final registration will come as the FCA ensures that they are in full compliance with the regulations.
Here is a list of the 5 companies that were given temporary registration:
- CEX.io LTD
- Copper Technologies (UK) Limited
- GLOBALBLOCK LTD
- Revolut LTD
- MONEYBRAIN LTD
These companies, along with the more than 30 that were already registered, are the only ones allowed to continue to conduct business in the UK. The other companies who did not complete their registration applications will no longer be able to conduct business as of April 1st of 2022.
Complaints About the Regulation Process
Along with most instances of new regulations being introduced, there are always a number of complaints that arise from the process. Many of the complaints, though valid, typically do not go any further than being a complaint.
The largest complaint during the FCA registration process has been the time it has taken to get through the entire process. Companies have stated that they have submitted their documents and have had to wait an unreasonable amount of time before hearing anything.
Many of the companies who have stated these complaints have since withdrawn their registration applications. While this is not the only reason for them backing out, it certainly was a large factor for many.
Another common complaint about the FCA registration process is the regulations themselves being more than the companies think should be in place. Many of these companies have withdrawn their registration applications because of their unwillingness to make changes to their operations.
Overall, the Financial Conduct Authority has come up with a registration process that cryptocurrency companies have to follow to continue conducting their business. After a long period of extensions granted, there were finally 5 companies that were granted temporary registration to conduct their business fully.