Cryptocurrency Companies Struggle to Meet ​UK Financial Regulator’s Standards

Nearly ⁢90% of⁣ cryptocurrency companies that applied to register in‍ the UK in the past 12 months failed to meet the Financial Conduct Authority’s (FCA) standards, according to⁤ the FCA’s 2024 Annual‍ Report.

The‌ report highlights that many cryptocurrency companies had ‌difficulty gaining approval⁢ due to ​deficiencies in fraud‍ prevention and anti-money laundering measures. Specifically, “more than 87% of cryptocurrency registrations were revoked, rejected or denied due to anti-money ‍laundering deficiencies.”

Source:⁤ FCA

Regulators approved​ only four ‌applications for ​crypto company‌ registration last year out ⁣of a total of 35. 15 applications were withdrawn and​ nine were rejected.⁣ The FCA cited that “the application was invalidated ⁢because it did not contain ⁤key elements necessary to ⁢conduct an assessment or the key elements ‍were of⁢ poor quality” as‌ a ‍reason for rejection.

Challenges in Registering Crypto⁢ Companies in the UK

The FCA’s feedback on poor applications points out the need for improvement⁤ in the ⁤quality of applications submitted by cryptocurrency companies.

Will​ Crypto Companies⁢ Flee the UK?

International law firm Reed Smith‌ warned that⁤ cryptocurrency companies ⁣should consider looking outside the UK to get started ​due to extremely long⁢ waiting times and ‍a lack of political will for the FCA to process ⁣new crypto ⁢applications⁤ quickly. The average processing time for a‌ crypto company registration has taken the FCA 459 days over the past three ‍years.

Furthermore, 186⁢ applications have been withdrawn over the past three years. ‌Brett Hillis, a‍ partner ​at Reed ⁣Smith, stated, “If applications are falling because crypto companies ⁣are getting impatient, giving up and starting ‌to look abroad, this‍ should be a ‍clear warning about London’s competitiveness.”