Key Points
- The FCA said that a small number of companies, including Revolut and Copper, will be permitted to continue trading after a temporary registration closes on Friday.
- In recent weeks, the temporary registration has reduced significantly, with B2C2 and Wirex among those who have withdrawn their applications.
- The deadline extension comes as British officials prepare to unveil a new crypto regulatory regime as early as next week.
On Wednesday, the Financial Conduct Authority in the United Kingdom announced that it is extending the deadline for some crypto firms to register with the regulator beyond the initial March 31 deadline.
The FCA announced that a small number of companies, including fintech firm Revolut and crypto start-up Copper, will be allowed to continue trading when a temporary registration regime expires.
Philip Hammond, the former U.K. finance minister, is one of Copper’s advisors.
According to the FCA, the interim register will close on Friday “for all but a tiny number of enterprises where temporary registration is strictly necessary” according to the FCA.
“Where a firm is seeking an appeal or has special winding-down circumstances, this is required.”
Under money laundering restrictions, crypto companies operating in the United Kingdom must register with the Financial Conduct Authority (FCA). The FCA established a temporary register to allow businesses to continue trading while they awaited full approval. Several companies, however, have yet to be chosen.
The temporary register’s list of companies has reduced significantly in recent weeks, with market maker B2C2 and trading app Wirex among those who have withdrawn their applications.
B2C2 is relocating its spot trading activities to the United States, while Wirex intends to offer crypto services to British residents through a Croatian company.
Only 12 businesses remain on the temporary regime, including Revolut, Copper, and Blockchain.com, a crypto wallet site.
‘Red Flags’ in Crime Were Ignored
Paysafe, a fintech company on the FCA’s full register, has expressed its support for “heightened regulatory scrutiny” of the crypto business.
“The registration process in the United Kingdom will eventually force a number of companies to abandon the United Kingdom market because they are unable to achieve the requisite risk and compliance criteria,” Chirag Patel, CEO of Paysafe’s digital wallets segment, said via email.
Despite this, the crypto industry has expressed dissatisfaction with the FCA’s handling of the registration procedure. According to industry insiders, the agency is understaffed and has been tardy in approving applications.
The FCA, for its part, claims that a “large proportion” of crypto businesses are failing to meet anti-money laundering requirements. So far, just 33 companies have made it onto the complete list.
“While we have registered 33 organizations,” an FCA representative stated via email, “we have observed too many financial crime red flags disregarded by the crypto asset enterprises seeking registration.” “Worse, we’ve witnessed cases where companies lack the required procedures to raise red flags in the first place.” According to CNBC sources, the watchdog’s deadline extension comes as British officials prepare to introduce a new crypto regulatory system next week. When contacted about the intentions, the Treasury Department declined to comment.
