More Crypto Asset Firms Withdrawing Application From UK Regulator

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In Brief
  • An increasing number of crypto asset firms are withdrawing their applications to register with the UK’s Financial Conduct Authority (FCA).

  • Since January, firms have had to register with the FCA to comply with anti-money laundering regulations.

  • The FCA recently issued a consumer warning against Binance, effectively ceasing its regulated activity in Britain.

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An increasing number of crypto asset firms are withdrawing their applications to register with the UK’s Financial Conduct Authority (FCA).

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An FCA spokesperson said that the number of abandoned registrations jumped by a quarter in less than a month. Around 64 applications have been withdrawn, which is up from 51 in early June, the spokesman said.

The FCA was appointed anti-money laundering and counter terrorist financing supervisor of crypto asset firms in January. Since then, crypto firms have had to register with the FCA before doing business. So far, the FCA has only registered six firms with dozens more still being assessed.

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However, firms that registered with the FCA before December 2020 are eligible for the Temporary Registrations Regimes (TRR). These firms can apply for the TRR, which allows them to continue trading while the FCA assesses their registration. 

The original deadline for the TRR was July 9, but was recently extended to March 2022. The FCA said it was extending the deadline because many businesses were not meeting the required anti-money laundering standards. Similarly to proper registration, “an unprecedented number of businesses” had withdrawn their applications, according to the FCA’s Mark Steward said.

FCA and Binance

Meanwhile, the FCA recently issued a warning against Binance, one of the world’s biggest crypto exchanges. The regulator also barred Binance from conducting any regulated activity in Britain. This means the UK now joins other nations that have started scrutinizing Binance.

A statement on the Binance website said that Ontario had become a restricted jurisdiction. As such, any users of the exchange based in the Ontario region were advised to “take immediate measures to close out all active positions by December 31, 2021.” Additionally, Japan’s regulator said that Binance was operating in the country illegally.

“The FCA is aligning with other major regulators, notably in the U.S. and Asia,” compliance head at Spectrum Markets Alpay Soytürk said.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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