Many cryptocurrency firms in the UK have failed to comply with the country’s anti-money laundering rules, according to the FCA
Yesterday, the UK financial regulator said that a large percentage of crypto companies in the country have not complied with the prescribed anti-money laundering and terrorist financing rules. The Financial Conduct Authority (FCA) pointed out that the sector is still plagued by money laundering and other illegal activities due to poor compliance with industry standards.
The cryptocurrency space has had a brisk influx despite the lack of support from the country’s top financial technology executives. The image of the crypto space was also occasionally damaged by unscrupulous parties involved in criminal activities. This has further underlined the need for regulations and the implementation of standards.
Earlier this year, the FCA in the UK enforced a rule requiring firms and companies dealing in cryptocurrencies to first register with the domestic regulator before doing any business. This step was intended to ensure that companies comply with the standards on money laundering and terrorist financing.
„From January 10, 2020, firms conducting certain crypto asset activities in the UK will be required to comply with the amended Money Laundering, Terrorism Financing and Money Transfer Regulations (Information about the Payer) of 2017 (MLRs) and register with the FCA.“
However, the FCA’s page for registered crypto asset firms shows that only five firms are registered. The five are Archax, Digivault, Gemini Europe Services, Gemini Europe and Ziglu.
„A significantly high number of companies do not meet the required standards under the anti-Money laundering regulations, resulting in an unprecedented number of companies withdrawing their applicationsaccording to the Financial Supervisory Authority
A further 90 companies, including eToro, Galaxy Digital, Huobi, Fidelity Digital, Revolut and Paybis, are currently temporarily registered. They may continue their activities while the examination of their applications continues. The independent supervisory authority notes that while they remain active, they do not yet meet the requirements.
The deadline for registration was postponed from July 9 to the end of March next year, as the establishment of a temporary registration system is a flaw.
„The FCA has granted temporary registration until 31 March 2022 to existing cryptoasset firms (those that operated MLR cryptoasset operations immediately prior to 10 January 2020) whose applications have not yet been decided.“
A total of 51 firms have withdrawn their application for registration with the supervisory authority, which means that they are not allowed to continue their activities.