UK Regulators Concerned With Crypto Firms’ Lax Anti-Laundering Rules

The U.K. Financial Conduct Authority (FCA) said that a “significantly high number” of crypto-related firms do not meet the country’s anti-money laundering requirements, CNBC reported today.

The regulator added that this failure to meet its standards is “resulting in an unprecedented number of businesses withdrawing their applications.”

British cryptocurrency companies must register with the FCA to operate. At the same time, the regulator also introduced a system of temporary licenses for firms that have not been officially approved yet, allowing them to continue their business.

Notably, only five crypto-related firms have fully registered with the FCA so far, with around 90 more continuing to operate under temporary licenses. This status, however, does not make them “fit and proper,” the regulator pointed out. 

Simultaneously, 51 companies have withdrawn their applications altogether and must suspend their operations entirely. To accommodate the remaining applications, the FCA extended its so-called Temporary Registration Regime from July 9 this year to March 31, 2022.

“The extended date allows cryptoasset firms to continue to carry on business whilst the FCA continues with the robust assessment being undertaken,” the regulator explained.

FCA fixed on crypto

In January, the FCA issued a consumer warning, highlighting five—arguably reasonable—concerns about crypto investment risks.

“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the regulator said at the time.

The regulator has reiterated its concerns in today’s announcement as well, noting that digital assets are “highly speculative and can therefore lose value quickly.”

Notably, this comes amid the long-standing skepticism toward digital assets regularly voiced by the Bank of England governor Andrew Bailey. Just recently, he called cryptocurrencies “dangerous” and argued that they have no intrinsic value.

Last October, Bailey also stated that it’s difficult to consider Bitcoin a payment method and is well-known for his quote, “If you want to buy Bitcoin, be prepared to lose all your money.”

Source: https://decrypt.co/72629/uk-regulators-concerned-with-crypto-firms-lax-anti-laundering-rules