NEW DELHI (CU)_A significant number of crypto firms are failing to meet the anti-money laundering standards of the Financial Conduct Authority (FCA), and are therefore withdrawing their applications to register with the British regulatory body. Accordingly, the FCA has decided to extend the deadline for the Temporary Registrations Regime for existing crypto-asset businesses from 9 July this year, to 31 March next year.
The process permits companies whose applications are being assessed to continue trading, while the firms which have not registered, or are not part of the aforementioned regime, are at risk of being subject to criminal and civil proceedings, if they continue trading.
“A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations resulting in an unprecedented number of businesses withdrawing their applications,” the FCA said in a statement Thursday.
In its statement the watchdog also warned investors regarding the speculative nature of cryptocurrencies, noting that they should be prepared to lose all their money. The regulator pointed out that regardless of whether the company has temporary or full registration with the FCA, it is unlikely that customers would have recourse to any compensation.
Since the inception of cryptocurrencies more than a decade ago, the industry has been plagued by lax standards on money laundering and other criminal activities. However, these standards are believed to have improved over the recent part. This was seen particularly in the UK, where crypto-asset businesses have had to comply with laws on anti-money laundering and counter-terrorist financing.
“The FCA will only register firms where it is confident that processes are in place to identify and prevent this activity,” the regulator said.
