The Financial Conduct Authority (FCA) has so far only given regulatory approval to 41 of the 300 crypto-related companies that have registered with the agency.
It would rather seem as though the UK is just not the place for digital asset companies, given that the regulating watchdog is just too fierce for most projects to deal with.
And this is despite last year’s announcement by the then Chancellor Rishi Sunak that the UK would become a world-leading crypto hub. Sunak is now the Prime Minister and still backs the plan, but if the regulatory environment is too harsh then who will come?
An announcement by the FCA today didn’t give any hard reasons as to why so many crypto companies did not finish their registrations, or just outright failed to be approved. Instead, the statement highlighted what it considered a good quality application compared with a bad one.
In its statement, the FCA provided the following in its Background section to how the registration was set up:
The FCA has been the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor of UK cryptoasset businesses since 10 January 2020. Since then, we have received over 300 applications for registration under the MLRs and determined over 260 as of January 2023. Of the applications we determined, we approved and registered 41 (15%), 195 (74%) were either refused or withdrew their application and we rejected 29 (11%) submissions.
The following sections appeared to be incredibly exacting and demanding of a crypto company wishing to be registered in the United Kingdom. In fact, it might be imagined that only larger or exceptionally well organised or resourced companies would be able to comply with such a process.
The image of a crypto startup staffed by a handful of devs springs to mind. A lot of now successful crypto companies achieved success from these kinds of humble beginnings. It might be imagined that many crypto startups would travel a 1000 miles away from the UK not to have to submit to such a toilsome process.
Of course, a lot of these projects would likely be exactly the kind of fraudulent setups that the UK certainly doesn’t need. However, some of them would potentially provide a lot of innovation and business for the UK. Surely some kind of middle ground can be found.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.