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The UK’s FCA reported that nearly 90% of crypto firms applying for registration under the country’s anti-money laundering rules failed to secure approval in the last fiscal year.?
According to the Financial Conduct Authority’s 2024 annual report, most applications were withdrawn, rejected, or refused due to weak money laundering protocols.
Crypto Licensing Failures and Regulatory Challenges
In its latest report, the FCA disclosed that only four companies met the required standards out of the 35 applications received.
BNXA (Binance’s payment partner), PayPal UK, and Komainu (a joint venture by Nomura) were among those approved by the regulator. However, 15 applications were withdrawn, likely due to the inability to meet the FCA’s anti-money laundering requirements. Nine applicants were rejected, highlighting the FCA’s regulatory stance.
FCA Rejects Nearly 90% Of Crypto License Applications –
The U.K. Financial Conduct Authority (FCA) reported that 87% of cryptocurrency companies that applied for licensing under the country’s money laundering rules failed to secure approval in its latest fiscal year.
Out…— The Industry Spread (@industryspread) September 5, 2024
The regulator also clarified in a feedback statement that applications lacking key components or containing poor-quality information were deemed invalid.
The FCA has been responsible for overseeing and registering crypto firms under its anti-money laundering rules since 2020.
Crypto firms in the UK are required to obtain a license before engaging in any virtual asset services. The FCA’s licensing regime protects UK investors by ensuring registered firms operate fairly, transparently, and with measures to prevent illegal activities.
Specifically, the FCA classifies digital assets as one of three types of tokens: exchange, utility and security.
For example, XRP is classified as an exchange token because of its role in facilitating cross border transactions.”https://t.co/i83i3CYQA9https://t.co/O4aR1zApeK pic.twitter.com/4Q36ktaJHL— Mr. Man (@MrManXRP) December 25, 2022
Despite its regulatory effort, the watchdog has approved only 44 companies out of the 359 applications it has received since January 2020.
The lengthy application process, averaging 459 days per registration, has drawn criticism from crypto firms, many of which have expressed frustration over the long wait times, lack of feedback, and perceived unfair treatment.
In a recent feedback statement, several companies indicated that the drawn-out registration process had led them to consider seeking regulatory approval in other regions while still serving UK-based customers from abroad.
With the Labour government elected in July 2024 pausing further crypto-related legislation, the future of the regulatory landscape in the UK remains uncertain.
