FCA emphasizes limited role of unregistered businesses continuing to operate

The number of unregistered cryptocurrency-related businesses continues to outweigh those signed up with the United Kingdom’s Financial Conduct Authority. Crypto.com was the latest company from the cryptocurrency ecosystem to register with the FCA. It joins a list that includes 37 companies that have been approved to offer services in the country.

Only seven companies have been registered in 2022 to obtain Money Laundering Regulations approval. These include eToro UK and DRW Global Markets LTD., Rubicon UK Limited, Zodia Markets Limited, Uphold Europe Limited, Rubicon UK Limited, Rubicon Global UK Limited, Wintermute Trading LTD., and Crypto.com, which is registered under FORIS DAX UK Limited.

The FCA also created a listof U.K.-based companies that continue to engage in crypto asset activity without being registered with them for Anti-Money Laundering purposes (AML). This extensive list includes firms that offer a range of cryptocurrency trading and foreign currency services.

New cryptocurrency-focused regulations were instituted in January 2020 to allow the FCA to supervise businesses operating in the space and enforce AML and counter-terrorism financing regulations.

Companies had just over a year to apply for temporary registration (TRR) eligibility, while failing to do so could lead to a criminal offense .

Related: Enforcement and Adoption: What does the UK’s latest regulatory goals for crypto mean to you?

Cointelegraph spoke with the FCA about its regulatory authority over the industry, the process for temporary registration and the number unregistered entities that are currently operating. The FCA stressed that they do not have consumer protection powers and does not control the entire cryptocurrency ecosystem.

The FCA noted that the FCA was not able to register U.K.-based cryptocurrency trading platforms for Anti-Money Laundering purposes. The FCA explained further that the TRR was created to allow existing crypto firms to maintain temporary trading permissions while they register.

Firms could still register with the FCA during the TRR and they can continue to do this after the April 2022 cut-off. Firms should not trade before they are registered, the regulator stated. All firms that were assessed by the FCA during the TRR were subject to an assessment, with the exception of those who needed to maintain temporary registration.

As of August 17, the latest FCA list of temporary registered firms had only one company. Revolut, which provides a variety of digital banking services to customers, is the only business on the FCA’s latest list.

Cointelegraph was told by a spokesperson for the FCA that registration standards were designed to provide a safe environment for investors and support the innovation promised in the industry.

“Successful registration is dependent upon a firm meeting minimum standards that we expect to prevent money laundering or terrorist financing. We have seen too many financial crime red alerts ignored by crypto asset businesses looking to register.”

The FCA will continue processing registration applications for cryptocurrency exchanges, service providers. It emphasizes the importance of minimal standards to ensure adequate systems to detect and prevent criminal funds from flowing.

“We have seen new regulated companies as a result. Many of these firms are using crypto or its underlying tech. Innovations benefit from strong, respected regulation that provides investor and consumer confidence.

Although the FCA acknowledged that it was unable to take action against unregistered operators within the country, the FCA continues to monitor these entities. The spokesperson pointed out that the U.K. Parliament is responsible for regulating the regulatory boundaries and ultimately decides what the authority regulates.

Opinion writer on 7trade7