The number of unregistered crypto-related companies still outnumbers those registered with the UK’s Financial Conduct Authority. Crypto.com has become the latest business from the cryptocurrency ecosystem to register with the FCA, joining a list of 37 confirmed companies with the green light to provide services in the country.
Only seven companies passed the registration process in 2022 to gain approval for money laundering regulations, which include eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited and Wintermute Trading LTD. Crypto.com is the seventh place, registered under FORIS DAX UK Limited.
The FCA has also compiled a list of UK-based companies that continue to carry out “crypto-asset activity” without being registered with the FCA for anti-money laundering (AML) purposes. The list is extensive, and mainly includes companies that provide a variety of cryptocurrency and foreign exchange trading services.
New regulations focused on cryptocurrency were introduced in January 2020 to allow the FCA to supervise companies operating in the space and enforce anti-money laundering and anti-terror regulations.
Companies have been given just over a year to apply to be eligible for a Temporary Registration (TRR) scheme, while failing to do so and continuing to operate could be considered a criminal offence.
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Cointelegraph has reached out to the FCA to discuss its regulatory reach over the industry, the process of the temporary registration system and the number of unregistered entities currently operating. The organization stressed that it does not oversee the entire cryptocurrency landscape and does not have consumer protection powers.
The FCA also notes that it has been limited in registering cryptocurrency exchanges in the UK for anti-money laundering purposes. She further explained that the TRR was set up to allow crypto companies already trying to register to hold temporary trading permissions during the process.
During the TRR, companies can still apply for registration with the Financial Conduct Authority (FCA) and can continue to do so after the stoppage in April 2022. The regulator also stressed that companies should not trade until they are registered. The Financial Conduct Authority (FCA) concluded evaluations of all companies during the TRR, except for those where it was necessary to continue with temporary registration.
The FCA’s most recent list of provisionally registered companies had only one company listed as of August 17. Revolut, which offers a suite of digital banking services, is the only business on this list that has seen companies decline slowly through 2021 and 2022. The FCA will not comment on the status of the individual company’s ongoing temporary registration.
An FCA spokesperson told Cointelegraph that the criteria it has set for registration are intended to provide a safe environment for investors while underpinning the innovation promised by the industry:
“Successful registration depends on the company meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we have seen many warning signs of financial crime that crypto asset companies seeking registration have missed.”
The Financial Conduct Authority (FCA) will continue to process registration applications for cryptocurrency exchanges and service providers, while emphasizing the importance of minimum standards to ensure adequate systems are in place to identify and prevent the flow of funds associated with criminal activities:
We have seen, as a result, new regulated companies, many of which rely on the use of cryptocurrencies or their underlying technology. Strong and respectful regulations help innovators by providing consumer and investor confidence.”
While the Financial Conduct Authority (FCA) has admitted that it lacks the teeth to crack down on unregistered operators in the country, it continues to monitor these organizations. The speaker highlighted the fact that the UK Parliament controls the regulatory surroundings and ultimately determines what the authority regulates.