UK FCA Rejects Most Crypto Firm Applications Due to AML Failures
In the past year, almost 90% of cryptocurrency companies that applied to register in the UK were unable to meet the requirements set forth by the nation’s financial regulator. The UK Financial Conduct Authority‘s (FCA) annual report for 2024 states that inadequate fraud prevention and money laundering procedures made it difficult for cryptocurrency companies to obtain licenses.
Over 87% of crypto registrations were withdrawn, rejected or refused for weak money laundering controls,
the report
Out of the 35 applications that crypto firms registered in the previous year, the regulator only approved four. Nine applications were denied, while fifteen were withdrawn.
We have rejected submissions that didn’t include key components necessary for us to carry out an assessment, or the poor quality of key components meant the submission was invalid,
the regulator said in a separate feedback statement
Reed Smith: FCA’s Delays and Lack of Political Will Are Pushing Crypto Firms Abroad
In order to guarantee that cryptocurrency advertisements in the UK were transparent, equitable, and not deceptive, the FCA also stated that it had established a new “financial promotion perimeter” for the industry in June 2023. Additionally, the regulator observed that the UK public had grown more vigilant against possible cryptocurrency frauds, with 63% of customers reporting a scam before investing in the project—a 5% rise from the previous year.
Due to extraordinarily lengthy wait periods and a lack of political will at the FCA to promptly handle new crypto applications, multinational law firm Reed Smith issued a warning on August 30th, suggesting that cryptocurrency companies hoping to get off the ground might want to consider moving outside of the UK. The FCA has taken 459 days on average over the past three years to process the registration of a cryptocurrency firm.
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