The UK Financial Conduct Authority (FCA) has approved only 13% of crypto firms’ applications. Some firms have pulled back the registration requests, alleging slow processing.
Crypto firms intending to operate in the UK must register with the FCA. However, the FCA registration process is becoming challenging for businesses.
The FCA Approved Only 38 Applications in 3 Years
According to a Right to Know request, the UK FCA received 291 applications from crypto firms willing to comply with the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).
Out of 291 applications, the FCA allowed only 38 firms to register. This makes up the approval rate of around 13%.
In total, the FCA has rejected 27 applications since 2020. Out of 27, the regulator rejected five firms for not fulfilling the criteria of the MLRs and the remaining 22 crypto firms for not providing the minimum required information.
According to a January 2023 report from the FCA, 85% of the firms failed to meet the minimum standards for registration.
Crypto Firms Criticize FCA
The FCA also informed that 155 crypto firms had withdrawn their applications for various reasons, such as not having all the required information. But the UK’s former Chancellor of the Exchequer, Philip Hammond, says otherwise.
Hammond, now serving as the chair of the crypto exchange Copper, believes that the FCA has slow processing for the crypto firms willing to register.
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Due to complexities in the application process, Copper withdrew from the FCA and registered in Switzerland. Hammond is also concerned that the UK is slipping behind in the race to become a crypto hub.
BE[IN]CRYPTO reported earlier this month that 75% of the participant of a survey faced challenges with their FCA registration.
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