September 24, 2022

FCA Admits To Not Maintaining Full Regulatory Oversight On The Crypto Space

Even though the Financial Conduct Authority (FCA), the regulatory body in the United Kingdom, has stepped up its efforts to monitor the crypto sector in the country.

Despite that, the number of unlicensed crypto companies that are offering their services in Britain has grown exponentially.

The FCA has issued licenses to a number of crypto companies that operate in the UK, which includes Crypto.com which received a license only recently. But, there are many companies that lack regulation.

Limited role

The FCA has been forced to admit that it does not have complete regulatory oversight over the crypto sector in the United Kingdom.

It also admitted that it is lacking in terms of consumer protection powers i.e. unable to provide adequate protection to the increasing number of investors in the crypto space.

Apart from that, the Financial Conduct Authority (FCA) also disclosed that its authority in terms of registering crypto exchanges in the UK is also limited under the anti-money laundering (AML) laws.

The regulatory authority stated that the temporary registration regime (TRR) had been introduced to permit crypto companies that were trying to register their business in getting temporary registrations.

TRR

In accordance with the TRR, crypto companies had the freedom to send in registration applications to the FCA, while continuing with their operations in the market.

The TRR had been put into effect when the COVID-19 pandemic had been at its peak, but once it was eradicated, companies had to get themselves duly registered before being allowed to operate.

A spokesperson of the FCA said in an interview that the registration standards that had been established were aimed at providing investors with a conducive environment while simultaneously supporting innovation.

Registered crypto companies

In the last few years, there has been a significant increase in the number of unregistered crypto companies in the United Kingdom.

Up until now, the FCA has given authorization to only 37 crypto firms to operate in the UK legally. This year, there have been only 7 companies that have been allowed to register and offer their services.

These companies were only issued licenses to operate after they ensured full compliance with Money Laundering regulations.

Some of the companies that did so include Crypto.com, DRW Global Markets LTD, Wintermute Trading LTD, Zodia Markets (UK) Limited, and eToro UK.

Apart from that, the FCA also issued a list of companies based in the UK that are offering crypto services without undergoing proper registration and have not obtained anti-money laundering (AML) approval either.

This is an extensive list and mostly includes companies offering crypto trading services, or foreign exchange companies.

New crypto regulations were introduced by the FCA back in January 2020. The regulations were aimed at helping the regulatory authority in supervising companies in the crypto space.

In addition, they also implemented AML and counter-terrorism financing (CFT) measures. One year had been given to companies to apply for registration under TRR, or else it was to be considered a criminal offense.

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