The Financial Conduct Authority (FCA), the primary financial regulator in the UK, has disclosed data showing that since January 2020, 291 cryptocurrency companies applied for registration, but only 38 were granted approval, constituting a mere 13% success rate.
Application Figures and Approval Rates
From January 2020, a total of 291 crypto firms sought registration with the FCA. Out of these, a mere 38 received approval, highlighting the stringent nature of the registration process. Notably, 155 applications were withdrawn by firms themselves, with the FCA encouraging resubmission if required information wasn’t provided.
Criteria and Compliance Mandates
Firms engaging in “crypto asset activities” within the UK are obligated to either be registered with the FCA or possess temporary operating status. However, the FCA’s regulatory criteria necessitates the provision of minimum information outlined in regulation 57 of the MLRs (Money Laundering Regulations). Failing to provide this required information results in rejection.
Current Landscape and Regulatory Actions
As of now, the FCA’s roster of registered crypto asset providers comprises 42 entities, including prominent names like Skrill, eToro, and Gemini. Recent regulatory actions include the FCA instructing Binance Markets Limited to cease operations in the country and issuing shutdown orders to local crypto ATM operators.
In a bid to ensure consumer protection, the FCA advised crypto asset firms to align their marketing strategies with its financial promotions regime by October 2023, suggesting a “cooling-off period” in marketing approaches to enable customers to assess investment risks.