300 Crypto Firms Jostled; Only 13% Clear UK FCA's Registration Hurdle

<p>The UK’s
financial watchdog continues to maintain strict supervision of the emerging crypto
industry in the country. Since January 10, 2020, 291 crypto asset businesses in
the country have applied for registration under the 5th Anti-Money Laundering
Directive (5MLD). However, the Financial Conduct Authority (FCA) has approved
only 38 firms or 13% of received applications. </p><p>Strict
Crypto Regime</p><p>The FCA disclosed these on Friday in <a href="https://www.fca.org.uk/freedom-information/information-crypto-asset-businesses-october-2022" target="_blank" rel="follow">its
response</a> to a Freedom of Information request. Despite
approving only 38 applications, the regulator said it does not decline firms.
It, however, further pointed out that it has so far refused five applications and rejected 22.</p><p>5MLD is a
set of rules introduced in January 2020 to bolster the European
country’s anti-money
and counter-terrorist financing regime. The regulation is the revised version
of the 4th Anti-Money Laundering Directive
(4MLD) created in 2015. </p><p>Additionally, the FCA clarified
that it refused certain applications because the applicants did not meet the
conditions for registration under the Money Laundering, Terrorist Financing and
Transfer of Funds Regulations 2017 (MLRs). MLRs are a set of rules in the UK
that outline the steps that business organizations must take to prevent money
laundering and terrorist financing.</p><p>“Firms are
required to provide the minimum information set out under regulation 57 of the
MLRs; any firm
that has not provided the required information will have their application
rejected,” FCA noted.</p><p>Moreover, the
financial markets supervisor noted that 155 crypto businesses withdrew their registration applications during the period. The
applications were cancelled for a number of reasons, including
not meeting the benchmark for registration as a digital asset exchange and
crypto custody wallet provider.</p><p>UK Plans
Crypto Rules</p><p>Meanwhile,
the UK, like the rest of Europe, is making progress with putting in place rules
to keep a close eye on the crypto industry. In June, King Charles III <a href="https://www.financemagnates.com/cryptocurrency/uk-adopts-crypto-and-stablecoins-as-regulated-financial-activity/" target="_blank" rel="follow">sanctioned a new law</a> that classifies the trading of
cryptocurrencies as a regulated activity and brings stablecoins under the scope
of payment rules. The bill also includes measures to control the promotion of
digital assets.</p><p>According
to the FCA, the number of crypto holders in the UK more than double in 2022. As
a result, the regulator is <a href="https://www.financemagnates.com/cryptocurrency/fca-provides-4-legal-routes-for-compliance-with-upcoming-crypto-promotion-rules/" target="_blank" rel="follow">actively seeking</a> to bring the marketing and
advertising of cryptocurrencies in the country under close scrutiny.
Supervisory rules in this regard are expected <a href="https://www.financemagnates.com/cryptocurrency/fca-seeks-incentives-ban-with-new-crypto-promotion-rules/" target="_blank" rel="follow">to come into force on
October 8</a>.</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.