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Highlights
- The FCA had set 31 March as the deadline for crypto firms in the UK to align themselves to its money-laundering laws.
- An FCA spokesperson revealed that it has approved applications from 33 crypto firms so far.
- However, it noted that more than 80% of the firms are still in the grey area, and their applications have either been rejected.
The UK's Financial Conduct Authority (FCA) and the Bank of England (BoE) are all set to bring the gavel down on crypto businesses operating within the country. Crypto businesses that haven't registered themselves with the FCA could be forced to shut shop ahead of the critical deadline next week.
The FCA had set 31 March as the deadline for crypto firms in the UK to align themselves to its money-laundering laws. Any failure to do so will see them booted out of the country.
Of late, the regulators have become stringent regarding the crypto business rules. Several steps have been implemented, such as notice to shut down all the Bitcoin (BTC) ATMs operating in the country. Besides, the UK Advertising Standards Authority (ASA) has also come down hard on the crypto firms for irresponsible advertising.
An FCA spokesperson revealed that it has approved applications from 33 crypto firms so far. However, it noted that more than 80% of the firms are still in the grey area, and their applications have either been rejected, or the firms have withdrawn their applications. FCA officials stated that the intention is to ensure standards and make certain that illicit crypto firms don't cheat investors of their funds.
More headaches
The recently released Financial Policy Committee (FPC) report has added difficulties for the crypto businesses. Released by BoE on 24 March, along with FCA and the bank's Prudential Regulation Authority (PRA), the report identified the growing risks posed by the Decentralized Finance (DeFi). The 40-page report revealed that though cryptocurrency’s risk factor is limited, the assets have become an integral part of the broader financial system, it requires a more extensive oversight of the crypto sector to ensure that it doesn't pose a greater risk to the financial system.
The FPC noted that the financial institutions must make sure that they take prudent steps to safeguard themselves and be cautious until a more robust framework is not created. According to a government poll conducted in January this year, approximately 9% of Britons currently hold cryptos. This figure was double what it was around the same period last year.
Conclusion
Next week will undoubtedly be a critical one for the crypto firms as they would be ensuring they have all the details in place to provide an FCA approval. However, certain sections are feeling a bit aggrieved and suggest that the FCA has a considerable backlog of applications to clear, and they may be able to get the approval on time.
