Financial Conduct Authority and Crypto Companies

The U.K.’s Financial Conduct Authority (FCA) made an important as well as timely decision. The regulator issued temporary regulations to crypto companies that have already submitted applications, but the regulator was not able to process all applications.

Let’s have a look at the announcement. This decision will allow the companies to continue trading for an extended period until July 9, 2021. As a reminder, the initial registration deadline was January 10, 2021.

It is worth noting that, Financial Conduct Authority became the supervisor of Anti-Money Laundering and Counter-Terrorist Financing measures for crypto companies in the U.K. less than a year ago, on January 10, 2020. As a reminder, all such companies have had to comply with AML regulations. This includes a requirement that they be registered by January 10, 2021.

Crypto companies and regulations

Unfortunately, not everything went according to this plan. Importantly, due to issues with site visits during the pandemic. Moreover, the complexity, as well as the standard of the applications received made it hard to process all applications. It means the regulator needs more time to accomplish this task.

The FCA issued temporary registrations to all businesses that submitted an application before December 16, providing an additional six months to process them. It is worth noting that the extension only applies to firms that operated in this industry before January 10, 2020. Importantly, any new company will require a full registration.

The process is quite complicated. Interestingly, the lack of clear requirements is a serious issue when it comes to filling the application. The regulator should work with crypto companies to solve all issues.

People should take into account that it is desirable to check whether the firm is on the register, has temporary registration, or can continue to trade due to being registered in a different country.

Importantly, any company not falling into one of these categories will be operating illegally if such a company will continue to operate after January 10, 2021. It makes sense to withdraw both crypto assets as well as money from such businesses before this date. This way, people will protect their crypto assets and money.

The Financial Conduct Authority made the best decision by granting temporary registrations to crypto companies. The regulator helped such companies to stay in business. However, the companies should cooperate with the regulator to comply with requirements in 2021. Hopefully, the regulator is willing to help companies.