The UK’s Financial Conduct Authority has warned that a high proportion of cryptocurrency firms are not complying with the country’s anti-money laundering regulations.
A high number of businesses are not meeting the required standards
Companies offering services related to cryptocurrencies must register with the Financial Conduct Authority. To allow firms whose applications have not yet been approved to continue trading, the regulator has introduced a temporary licensing regime.
The FCA said Thursday that it had pushed back the deadline for the so-called Temporary Registration Regime from July 9, 2021, to March 31, 2022.
The regulator’s process is very time-consuming and inefficient
According to people familiar with the FCA’s process, the process is very time-consuming and inefficient. Also, a shortage of manpower plays a role in the process of being registered taking so long.
The FCA’s inaction has already prompted lobby group CryptoUK to intervene and ask the finance minister Rishi Sunak for support.
“Customers should be prepared to lose all their money”
There are currently only five crypto companies registered with the FCA. Gemini, founded by Tyler and Cameron Winklevoss, and Ziglu, a British start-up, are among them. Hundreds of applicants are on the Temporary Registration Regime waiting list.
The firms that are not part of that regime or registered with the FCA are at risk of being subject to the regulator’s criminal and civil enforcement powers if they continue trading.
Customers should be prepared to lose all their money, the FCA said in the statement. It is unlikely to be able to seek for compensation regardless of whether a firm has a temporary or full registration with the FCA, it said.