Crypto Firms Raise Concerns Over FCA Registration Delay, Seeks HM Exchequer’s Intervention
Crypto firms in the United Kingdom have raised concerns over the Financial Conduct Authority’s (FCA) delay in registering their businesses. This was made known by CryptoUK, a trade body launched in 2018 that represents over 50 businesses in the crypto-asset industry.
CryptoUK Seeks HM Chancellor’s Intervention
In a letter to the HM’s Chancellor of the Exchequer, Rishi Sunak, the trade body’s chairman Ian Taylor wants his intervention to expedite the country's compulsory crypto business registration.
Taylor complained about the FCA's lack of responsiveness in the registration process.
According to Taylor, the FCA is so slow that out of 200 crypto businesses' applications to the FCA's Money Laundering Registration (MLR) regime, only four have been granted a decision. He stated that only a few companies had received the regulator's responses, thereby making it hard for crypto companies to sign up under the new regulatory regime experience.
The FCA Registration Process
Last year January, the FCA was appointed as a direct regulator for cryptocurrency companies based in the UK. Having become an anti-money laundering and counter-terrorist financing supervisor of businesses, the FCA brought in the MLR scheme requiring crypto-asset businesses to become compliant and register to continue trading.
The regulator had warned crypto firms of having their activity suspended in the country if they failed to submit their application by the deadline date. The date was initially set for June 30, 2020. The deadline was later postponed to January 10, 2021, to accommodate more firms to join in.
However, right before the new deadline elapsed, the regulator acknowledged a backlog of applications from crypto firms that were already trading which it stated was caused by the coronavirus pandemic.
This brought about a temporary relief for companies who had already applied. They were given preliminary approval from the regulator to operate till July 9, 2021. Speaking about the latest deadline, Taylor fears many firms might cease operations in the UK due to the zero progress in their applications.
“The clock is again ticking as we approach the new July deadline, whereby existing firms legally have to cease trading. Additionally, hundreds of new businesses have been waiting for months to progress their applications, with staff and overhead costs mounting, as they cannot start trading and earning revenues until their application has been approved.”
The CryptoUK chairman believes the effect of such decisions could lead to an exodus of firms, which would harm an economy still reeling from the impact of Brexit and Covid-19.
Taylor said that, while he understands the challenges that occur with registration processes as new regulatory regimes take time, he also thinks the issues should be looked at fairly, as they are worrisome.