Major changes await the British crypto industry. All companies that want to continue working with cryptocurrencies must register with a financial supervisory authority by March 31. Otherwise, they lose the right to work on the market legally. The changes apply only to cryptocurrency companies and don’t cover organizations from other areas, such as Payday Depot.
Obtaining a license is a way to combat money laundering
The British FCA is the main regulator that oversees a crackdown on financial fraud in companies with digital assets.
In 2021, the period of temporary operation within its internal register was extended for the companies. A request for full permission was considered a prerequisite. However, the FCA said that a significant number of organizations decided to withdraw the requests. The reason was non-compliance with existing anti-fraud standards.
There are a few days left until the deadline. It is still unknown whether many of the temporarily registered companies, including high-profile Revolut and Copper, will continue to operate.
Organizational problems
Many industry sources, who wish to remain anonymous, were dissatisfied with the registration process. They note slow application processing or the absence of any feedback.
An FCA spokesman said only 33 companies had received approval. At the same time, more than ¾ of organizations received an official refusal or independently withdrew their applications.
It is worth noting that the firms have the right to appeal a decision of the regulator. This can be done in court.
Opinions of entrepreneurs
One of the first cryptocurrency companies to receive FCA approval was the Gemini exchange. Its British representative office made a statement about the importance of the licensing procedure. It allows gaining the trust of a client by offering cooperation with an officially verified and reliable organization.
According to the head of Gemini in the UK, the official registration can be a key advantage for cryptocurrency companies to distinguish them from many competitors.
Some industry leaders have criticized the regulator for being too slow in processing applications. This has led to an accumulation of applications, some of which are withdrawn by organizations. This is exactly what B2C2 did.
The organization completely transferred operations to its own division in the United States. At the same time, representatives of B2C2 reported no losses since its licensed subsidiary organization continues to operate in the UK.
Features of the crypto market in the UK
Recently, the US and European countries have been showing increasing loyalty to the crypto industry. Members of the governments are beginning to focus not only on the risks but also the opportunities of this market. However, in the UK the situation is different.
The requirements for companies create restrictions that could lead to the exit of crypto firms from the UK market. But this approach is contrary to the state’s goal to take a leading position in the field of financial innovation globally.
What awaits companies that don’t get into the full register? They can completely cease to exist or go offshore. Very soon, we will find out how this story will end for the British crypto industry.
