The financial watchdog of the United Kingdom, the Financial Conduct Authority (FCA), has extended the period for crypto firms in the country to register their operations and come into compliance with its anti-money laundering (AML) and other requirements.
In a press release issued today, the financial regulator confirmed that the Temporary Regulatory Regime (TRR) for existing crypto firms will be extended until March 31, 2022.
The extension of the deadline, which had initially been set at July 9, 2021, affords crypto companies with a bit of breathing space to work as they hope to ensure compliance with the FCA.
However, it also highlights the difficulties that cryptoasset firms are having in complying with AML rules, especially requirements such as the “travel rules’ that the G20 Financial Action Task Force has urged states to introduce, in which exchanges and other virtual assets service providers would need to be able to identify receivers and senders involved in crypto transactions.
FCA Crypto Registration: A Rough Ride So Far
The FCA has been working significantly to provide a regulatory regime for crypto companies in the U.K. ever since it assumed the role of watchdog for the country’s crypto in 2020. The agency had initially set the registration deadline for June 2020. It even sent out successive warnings, telling companies that anyone not registered by the deadline will have to close shop and cease operating.
Unfortunately, the regulator got swamped with applications from the outset as companies eager to capitalize on the British market were applying round the clock. The coronavirus pandemic also delayed the review process significantly, and all these factors led the FCA to scrap the registration program entirely.
To replace the programme, the FCA introduced the TRR scheme last December. Under the scheme, crypto companies that had applied for registration before December 16, 2020, and whose applications were still being assessed would be able to continue operating until July 9, 2021 – a date which, according to today’s press release, has now been extended.
The Importance of Money Laundering Regulations
On the reason for the extension, the FCA explained that a high number of companies are yet to meet its Money Laundering Regulations standards – leading to a mass application withdrawal. With the extension, crypto companies based in the UK can continue operations while the regulator examines their applications.
“ Anti-money laundering and counter terrorist financing legislation are aimed at protecting against enabling the transfer and disguise of funds from criminal activity… While this is not the only element that the FCA will assess in relation to an applicant, the FCA will only register firms where it is confident that processes are in place to identify and prevent this activity,” the release added.
Several companies have received crypto registration approval from the FCA, including the Gemini Foundation, digital security exchange Archax, and crypto banking organisation Ziglu. However, many more – including big digital service firms like eToro and Revolut – are still waiting on their approval.
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