Local and international crypto businesses in the United Kingdom seem unable to meet stringent demands set by financial regulators.
The United Kingdom Financial Conduct Authority’s (FCA) crypto licensing regime is reportedly proving arduous for cryptocurrency businesses looking to operate in the country.
According to a Reuters report on Tuesday, the number of withdrawn licensing applications from crypto businesses increased by over 25% in June.
Indeed, Cointelegraph reported near the beginning of the month that 51 crypto firms had withdrawn earlier submitted filings for registration with the FCA. An FCA spokesperson quoted by Reuters said that 13 more companies have pulled out of the approval process, bringing the total number of withdrawals to 64.
Since January 2020, the FCA has been overseeing Anti-Money Laundering compliance for the country’s crypto sector. At the time, the agency instituted a registration scheme for cryptocurrency businesses with an initial deadline of one year.
However, the FCA has been forced to create and extend a temporary registration regime amid a backlog of licensing applications.
By exiting the licensing process, these companies must cease all crypto-related activities or risk incurring fines and legal action by the FCA. However, some companies not covered under the agency’s AML mandate might be able to continue offering services.
Earlier in June, the FCA issued a notice to U.K. consumers about 111 unregistered crypto companies in the country.
Related: 51 crypto firms withdraw licensing applications in the UK
The raft of withdrawn applications comes amid increased regulatory scrutiny on crypto exchanges across several jurisdictions. The FCA itself has taken action against some major platforms including Binance.
Apart from the U.K., regulators in Japan and Ontario, Canada have also issued warning notices to Binance. The crypto exchange giant reportedly withdrew its licensing application in the U.K. back in May.
For Yoni Assia, CEO of trading platform eToro, industry participants should expect even more regulatory actions from state agencies. However, the eToro boss advised regulators to improve their knowledge of the cryptocurrency space and come up with nuanced policies.
