The Financial Conduct Authority (FCA) has slammed cryptocurrency-related firms for not adhering to anti-money laundering (AML) and counter-terrorism financing (CTF) rules.
Reuters reported today that while crypto firms have been mandated to register their businesses with the FCA since January 2020, regulators noted that firms have not complied with AML and CTF rules.
Based on this negligence, the FCA noted that it would only process firms’ registration when it is certain that they had the necessary measures in place to curb various AML activities.
“The FCA will only register firms where it is confident that processes are in place to identify and prevent this activity [money laundering],” the report stated.
Few Crypto Firms Comply With FCA Directive
According to an announcement by the FCA in 2020, crypto-related firms were mandated to register with British regulators from January 10, 2020, to ensure they comply with the AML and CFT rules.
Since the directive was issued to date, the regulator said only five crypto businesses, including Gemini Europe Ltd., have successfully completed their registration.
In addition, the watchdog said a total of 90 crypto firms, including Lykke Corp, Galaxy Digital UK, CEX.io are temporarily registered with the FCA.
Per the report, appearing on the temporary registration list does not mean the listed firms have been accessed and considered fit to function within the U.K. jurisdiction.
Temporary registration status is given to firms that have been in operation before January 10, 2020, when crypto-related companies were mandated to register with the British watchdog.
The temporary registration regime will come to an end on March 31, 2022, the report added.
Furthermore, Reuters reports that about 51 firms have withdrawn their initial registrations from the FCA, a move that implies that these companies can no longer operate in the United Kingdom.
Regulators Have the Wrong View About Cryptos
Cryptocurrencies have been accused of being widely used to conduct illicit activities, especially money laundering and terrorist financing.
These concerns have prompted global regulators to establish certain rules that would eliminate the threat posed by the asset class in these activities.
One of these rules requires crypto-related firms, especially trading platforms, to provide specific details of their customers, including full names and details of transactions, among others.
While regulators may seem happy with the development, most crypto businesses believe the move goes contrary to the idea behind crypto, which focuses on users’ privacy.
The FCA has made significant efforts to help crypto businesses thrive in the region. The FCA has moved to ensure more crypto firms register their businesses with relevant authorities, including reducing registration fees for crypto businesses.
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