In March, the UK’s Financial Conduct Authority (FCA) warned that all digital asset companies were required to register by the end of the month. But only 50 companies complied with the requirement. If organizations continue to operate cryptocurrencies in the U.K. without a license, it will be a criminal offense, the FCA said.
According to a Bloomberg publication, there are still 12 companies on the provisional register awaiting regulatory approval. Among them are digital payments platform Revolut and custodial service Copper Technologies. Last week, cryptocurrency market maker B2C2 was removed from the temporary registry, as well as Wirex and Trastra – they have not received FCA approval.
Many cryptocurrency companies have already begun moving operations abroad, targeting European countries such as Croatia and Switzerland. An FCA spokesperson said that organizations that do not meet the agency’s criteria can withdraw their application or appeal the denial. Copper Technologies executives said they would continue to engage with the FCA on the issue.
Gemini Cryptocurrency Exchange UK head Blair Halliday said he has received notifications from companies that have recently set up business in another jurisdiction, but intend to continue serving UK users. According to Halliday, the problem with the legislation is that it can be unfair to cryptocurrency organizations, so they are forced to go offshore, taking clients abroad. Gemini was registered with the FCA in August 2020.
“Obviously, many companies are too young and don’t understand how to deal with regulators. Withdrawing applications or getting rejected shows an inability to comply with the FCA’s strict anti-money laundering requirements”, Holliday said.
This month, the FCA created a new division to regulate the cryptocurrency industry. The U.K. Advertising Standards Authority (ASA) has urged marketers to be more responsible when advertising cryptocurrency products so as not to mislead users.