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approved only four applications for crypto company registration last year out of a total of 35. 15 applications were withdrawn and nine were rejected.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Furthermore, 186 applications have been withdrawn over the past three years.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.”