U.K. FCA Issues Temporary Crypto Registrations Due to Applications Backlog
- Crypto firms that have submitted their FCA applications prior to 16 December can now operate legally until 9 July, 2021.
- The FCA needed the extra six months, as it was falling behind schedule due to the COVID-19 pandemic, and the “complexity and standard of the applications received”.
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The U.K. Financial Conduct Authority (FCA) has issued temporary six months registrations to crypto firms in order to give itself time to process the submitted applications, the regulator said in a press release on 16 December.
According to the announcement, the FCA is behind schedule on reviewing applications due to the coronavirus restrictions on visits and “the complexity and standard of the applications received”. The six months extension — that will allow firms to operate until 9 July, 2021 — only applies to companies that have submitted their applications prior to 16 December. The watchdog further advised all customers to check whether their chosen firm is on the register, has received temporary registration, or is registered in a different country.
Firms that started operating after 10 January have not received the regulator’s temporary registration, as they should have registered with the FCA prior to starting their business. The FCA became U.K.’s Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) supervisor for crypto businesses at the start of 2020. Since then, the regulator has been in charge of enforcing the country’s new AML and CTF compliance requirements.
The regulator has been urging crypto businesses to register with it since June, stating that any firm that fails to do so will be operating illegally after 10 January, 2021, and runs the risk of “being subject to the FCA’s criminal and civil enforcement powers”.
Back in October, the financial watchdog officially prohibited the sale of crypto derivatives and Exchange Traded Notes to retail users in the U.K.. The reason behind the ban was that these products were “ill-suited” for retail investors, and that by prohibiting them the FCA will save investors around £53 million per year.
- The U.K. Financial Conduct Authority continues its crackdown on crypto ATMs in the country, and has disrupted a total of 26 machines since the start of the year.
- The regulator warned the public back in March 2022 that all crypto ATMs in the country were operating illegally, and issued a “shut down or face further action” order.
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- Unnamed sourced told the Financial Times that the U.K. Treasury was preparing new rules that would give the FCA broader powers over the crypto market.
- The regulations will allow the FCA to monitor and limit operations and advertising of crypto companies, as well as restrict crypto sales in the U.K. from foreign companies.
- The Financial Conduct Authority has warned investors that crypto exchange FTX “may be providing financial services without authorization” in the U.K..
- A spokesperson for FTX said the exchange believed it was impersonated by a scammer, as the phone numbers provided by the FCA were not connected to it.