Despite the plans to turn the region into a bustling crypto hub, the United Kingdom\u2019s financial watchdog says it has given the all-clear to only 41 out of 300 crypto firm applications seeking regulatory approval to date.<\/p>\n
The U.K. Financial Conduct Authority (FCA) implemented the new cryptocurrency-focused regulations on Jan. 10, 2020, to supervise businesses operating in the sector and to ensure that they\u2019re subject to the same anti-money laundering (AML) and counter-terrorism financing (CTF) regulations as firms in traditional financial markets.<\/p>\n
A statement<\/a> from the FCA has revealed that of the 265 applications that were “determined” a mere 15% of these applications were approved and registered, 74% of firms either refused or withdrew their application, while 11% were rejected. Another 35 applications are yet to be determined.<\/p>\n While the FCA didn\u2019t expressly state the cause of d the rejected or withdrawn applications, it did provide feedback on \u201cgood and poor quality\u201d applications. <\/p>\n Among the more complete applications included a detailed description of the firm\u2019s business model, the roles and responsibilities of business partners and service providers, sources of liquidity, flow-of-funds charts, and an outline of the policies and systems set in place to manage risk, the report stated.<\/p>\n Incomplete applications were more apparent where companies used the application to promote their products and services, particularly in cases when the application process was still ongoing:<\/p>\n \u201cApplicants\u2019 websites and marketing material must not include language that gives the impression that making an application for registration is a form of endorsement or recommendation by the FCA.\u201d<\/p><\/blockquote>\n The report suggests that some companies may have had their applications scrapped if they couldn\u2019t show that they have sufficient blockchain-compliance resources set in place to monitor on-chain transactions.<\/p>\n The FCA also doubled down on its anti-money laundering stance, demanding that all firms appoint a money laundering reporting officer who is \u201cfully involved\u201d in the application process. <\/p>\n The FCA also stressed that even for those firms that had their registrations approved, such approval doesn\u2019t mean that they\u2019re no longer free from obligations:<\/p>\n “Applicants must recognize that being registered is not a one-off formality or a tick-box exercise without any further obligations or interaction with the FCA.\u201d<\/p><\/blockquote>\n “This feedback should help applicants when they prepare their application for registration and help make the process as simple and efficient as possible,” the note summarized.<\/p>\n Among the digital asset firms to have registered<\/a> under the FCA thus far include Crypto.com,<\/a> Revolut, CEX.IO, eToro, Wintermute Trading, DRW Global Markets, Copper, Globalblock, Moneybrain and Zodia Markets.<\/p>\n Related: <\/em><\/strong>British authorities split on banning sale of crypto investment products<\/em><\/strong><\/a><\/p>\n Given that many companies provide international services, the U.K. FCA also confirmed that they\u2019re now collaborating with other state agencies<\/a> around the world \u2014 most notably the U.S. securities regulator and the U.S. commodities regulator \u2014 in order to strengthen regulation where necessary. <\/p>\n The FCA has stressed on several occasions that failure to register before conducting business may result in criminal charges.<\/a><\/p>\n<\/div>\n![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/03a07df8-4d9a-4920-9599-483444034520.jpg\" "\\"\\"")