UK FCA establishes temporary crypto registration regime due to backlog

Regulatory body buys itself a further six months to process submitted applications.

Photo: Cointelegraph

The United Kingdom’s Financial Conduct Authority has issued temporary registrations to crypto-asset companies that have already submitted applications but not yet been processed.

According to a Dec 16 announcement, this will allow the companies to continue trading for an extended period until Jul 9, 2021, following the initial registration deadline of Jan 10, 2021.

As Cointelegraph reported, the FCA became the supervisor of Anti-Money Laundering and Counter Terrorist Financing measures for crypto firms in the United Kingdom on Jan 10, 2020.

From this date, all such companies have had to comply with AML regulations, with a requirement that they be registered by Jan 10, 2021.

However, due to issues with site visits during the pandemic and what it describes as “the complexity and standard of the applications received,” the FCA has so far not been able to process all of the applications.

It has therefore issued temporary registrations to all businesses that submitted an application before Dec 16, providing an additional six months to process them. The extension only applies to firms that were doing business prior to Jan 10, 2020, while any new company will require a full registration.

One firm that has received a temporary registration commented on the lack of clear requirements being an issue when filing its original application. Sergey Zhdanov, chief operating officer of Exmo, added:

“We have some experience in getting an AEMI license (electronic money institution). It’s not exactly a piece of cake, but during that process the FCA tells you what is wrong or right and what you need to improve to get the license. Here we didn’t have that luck.”

The FCA is advising all customers of crypto asset firms to check whether the firm is on the register, has temporary registration or can continue to trade due to being registered in a different country.

Any company not falling into one of these categories will be operating illegally if it continues to trade after Jan 10, 2021, so customers are advised to withdraw both crypto assets and money from such businesses before this date.

In October of this year, the FCA enacted a ban on all cryptocurrency derivatives products, such as futures, options and exchange-traded notes to retail customers due to the alleged “harm they pose.”

Reprinted from Cointelegraph, the copyright all reserved by the original author.