UK regulators have granted an extension to crypto firms that have already applied for operating licenses until July 2021 while the agency works to clear the registration backlog.
Meanwhile, crypto businesses that failed to meet the Dec. 15 deadline must now return all customer funds and shutter their operations by the start of 2021.
Unregistered Crypto Firms to Cease Operations by Jan. 2021
The UK’s Financial Conduct Authority (FCA) announced a “temporary registration regime” for crypto businesses via a press statement issued on Dec. 16.
An excerpt from the announcement reads:
The Temporary Registration Regime is for existing cryptoasset businesses which have applied for registration before 16 December 2020, and whose applications are still being assessed. This is to enable those existing businesses to continue to trade after 9 January 2021 until 9 July 2021, pending the FCA’s determination of their application.
According to the press statement, the FCA needs more time to assess the applications submitted by crypto businesses. The UK regulator also blamed the COVID-19 pandemic and the complex nature of the industry as reasons for the delay in processing the registrations of cryptocurrency businesses.
As previously reported by BeInCrypto, the FCA has maintained regulatory oversight over crypto asset companies in the UK since Jan. 10. At the time, the agency mandated that all existing cryptocurrency firms must register with the FCA.
As part of the press release, the FCA also declared that firms that failed to meet the Dec. 15 application deadline are ineligible for the temporary registration regime. Such crypto businesses must now cease operations by Jan. 10, 2021, or risk criminal prosecution from the FCA.
Apart from closing their businesses, crypto firms that did not meet the registration deadline must also refund all customer funds. The FCA also advised UK crypto investors to ensure that they deal with companies listed in its registration portal.
The announcement is the latest in the FCA’s continued agenda of strict crypto regulatory actions.
Back in February, the UK regulator increased cryptocurrency business registration fees to £10,000 ($13,500). In October, the FCA finally followed through on its plan to ban retail crypto derivatives trading in the UK.