Close to 90% of the crypto companies applying to register in the UK over the past year have not adhered to the standards of the Financial Conduct Authority [FCA].
The financial watchdog recently released its annual report underlining how firms have been struggling to get approvals owing to insufficiencies in their fraud protection and money laundering protocols.
Specifically, the report highlighted,
“Over 87% of crypto registrations were withdrawn, rejected or refused for weak money laundering controls.”
The agency said that it helps firms apply for authorization by communicating its expectations and issuing guidance on good and poor practices. This, according to the FCA, helps firms understand what is required.
At the moment, a little over 40 crypto firms based in the UK have money laundering registrations.
Only four out of the 35 applications that were received by the FCA managed to qualify for registration last year.
Elaborating on why, the agency's report noted,
“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 UK regulator also firmed its grip on crypto marketing recently. Under the new guidelines, firms marketing crypto assets to consumers in the UK must ensure that the promotions are “clear, fair and not misleading.”
This helps consumers “better understand” what they are purchasing, and the risks involved. They also benefit from a new 24-hour cooling-off period.
The agency’s report highlighted,
“We issued 450 consumer alerts against firms illegally promoting crypto assets in the first 3 months of the rules going live.”
The FCA asserted that it continues to play a “leading role” internationally by helping shape the global standards with respect to crypto.
