FCA: “Significantly high” number of crypto firms not meeting AML standards
Cryptocurrency firms in the UK are falling short of the nation’s anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, says the Financial Conduct Authority (FCA).
The UK regulator has issued an extension to its Temporary Registrations Regime (TRR) for existing cryptoasset businesses, pushing the deadline back from 9 July 2021 to 31 March 2022.
It established the TRR in 2020 to allow existing cryptoasset firms that applied for registration to continue trading.
Now it says a “significantly high number of businesses” have not met the required standards. It adds it has seen an “unprecedented number of businesses” withdrawing their applications.
According to the watchdog, 51 firms have withdrawn from the process, only five are fully covered, while 90 sit on the temporary register.
“The extended date allows cryptoasset firms to continue to carry on business while the FCA continues with its robust assessment,” the FCA writes.
“While this is not the only element that the FCA will assess in relation to an applicant, the FCA will only register firms where it is confident that processes are in place to identify and prevent this activity.”
The regulator issued warnings at the start of the year over the volatile price of cryptocurrency assets.
It says consumers who invest in crypto assets “should be prepared to lose all their money” due to their “significant price volatility”.
Meanwhile, the UK’s HM Treasury is in the first stages of a consultative process over the regulation of both cryptoassets and stablecoins.