UK’s Financial Conduct Authority Tightens New Crypto Platform

Key Points:

• The UK’s Financial Conduct Authority failed to approve any new crypto business registrations in the past six months.
• Out of 34 applications reviewed in the past 12 months, only four were approved, with most rejections attributed to failure to meet anti-money laundering standards.
• The FCA is set to introduce a market abuse regime for crypto assets this year, aiming to protect consumers.

The United Kingdom’s ambition to establish itself as a global hub for crypto asset technology is facing significant challenges.

Read more: FCA Extends Crypto Marketing Deadline Until 2024

UK’s Crypto Hub Dream Falters as Financial Conduct Authority Freezes Registrations

Despite a 2022 pledge by former Prime Minister Rishi Sunak to make the UK a “global cryptoasset technology hub,” progress has stalled. Based on data obtained by DL News, the Financial Conduct Authority has not approved any crypto business registrations in the past six months.

In the last 12 months, the Financial Conduct Authority has received 34 applications to have their crypto businesses registered, with only four of them going through. Those that were able to get approval include the likes of Portofino, crypto bank Banxa UK, payments giant PayPal, and custodian Koimanu.

New Market Abuse Regime Planned as FCA Seeks CRYPTO Oversight Improvement

The Financial Conduct Authority believes that most of them did not meet the anti-money laundering standards. The agency further claims that its strict rules are in place to protect consumers and make sure that the financial system is not used to launder ill-gotten gains.

Industry lobbyists argue that the rules are too intricate and burdensome. More specifically, the stress falls on issues about consumer-focused marketing rules. The rules have caused companies like Binance and PayPal to stop their crypto services in the UK, citing compliance issues.

This does not deter the FCA from further wanting to develop a market abuse regime for crypto assets as part of business planning that seeks to protect consumers and the improvement of the UK’s position in the global market.

Last year, the UK government called for views on establishing a market abuse regime dedicated to the crypto-asset class, with improved control exhibited in the realm of fast-changing digital assets.