In July 2019, the UK’s financial watchdog: the Financial Conduct Authority (FCA) proposed a ban on cryptocurrency derivatives, such as contracts for difference (CFDs), futures, options and exchange-traded notes (ETNs). The proposal stated that the ban will be only applied to retail investors as they “cannot reliably assess the value and risks of derivatives or exchange-traded notes (ETNs) that reference certain crypto-assets”.
Today, the FCA announced that they have now become the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor for businesses carrying out certain crypto-asset activities. According to their dedicated crypto-asset website, the following are considered crypto-asset activities: crypto exchange provider, crypto ATM, P2P providers, issuance of new crypto-assets (for example ICOs and IEOs) as well as custodian wallet providers.
Unlike the proposal made in July 2019, the purpose this time is not to protect less-informed retail investors, but rather to prevent money laundering from occurring by setting the correct guidelines.
Any new business that will carry crypto-asset activities will need to register with the FCA prior to launching. Already existing businesses that have crypto-asset activities will also need to register with the FCA by January 2021. To prevent delays, these businesses must first submit a completed application for registration by June 2020.
In a recent announcement, the FCA has released a reminder for businesses to submit their applications before the end of this month.
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