Nearly 90% of crypto registrations in UK failed due to ‘weak’ fraud, AML controls
The UK Financial Conduct Authority accepted only four out of 35 crypto firm applications, citing concerns about anti-money laundering.
Nearly 90% of cryptocurrency firms that applied for registration in the United Kingdom in the last year did not match the country’s financial watchdog’s rules.
According to the UK Financial Conduct Authority’s (FCA) annual report for 2024, crypto businesses had difficulty obtaining certification due to deficiencies in their fraud protection and money laundering procedures.
“Over 87% of crypto registrations were withdrawn, rejected or refused for weak money laundering controls,” the report’s authors stated.
Only four of the 35 applications for crypto company registration were granted by the authorities last year. 15 applications were withdrawn, and 9 were denied.
“We have rejected submissions that did not include key components required for us to conduct an assessment, or the poor quality of key components rendered the submission invalid,” said the regulator in a separate feedback statement.
The FCA also stated that it had finalized a new “financial promotion perimeter” for cryptocurrency advertising in June 2023 to guarantee that crypto adverts in the UK were clear, fair, and not misleading.
The regulator also stated that the public in the UK has become more aware of potential cryptocurrency scams, with 63% of consumers reporting a scam before investing in the project, up 5% from the previous year.
Crypto firms may look outside the UK
On August 30, multinational legal firm Reed Smith warned that crypto enterprises wishing to get started should go beyond the UK, citing exceptionally long wait periods and a lack of political will at the FCA to handle new crypto applications promptly.
In the last three years, the FCA has taken an average of 459 days to process a crypto firm’s registration. The watchdog has spent a total of 25 years’ worth of personnel processing the applications. Meanwhile, 186 applications withdrew their forms over the last three years.
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