Many cryptocurrency firms are not meeting Britain’s anti-money laundering and counter-terrorism financing rules and standards, the country’s financial watchdog said, indicating how some parts of the emerging sector are struggling to meet required standards.
The cryptocurrency world has been beleaguered through its 12-year life by lax standards on money laundering and other illicit activities.
Although the standards are widely seen to have improved, global regulators and policymakers have in recent months expressed concerns over the illicit use of crypto.
Since January, cryptocurrency-related firms have had to register with Britain’s Financial Conduct Authority (FCA) – the statutory body, overseeing their compliance with UK laws designed to prevent money laundering and terrorist financing – before doing business.
“The FCA will only register firms where it is confident that processes are in place to identify and prevent this activity,” it said.
As of now, only five firms are registered with the FCA. However, earlier another 90 have got temporary registration, allowing them to continue trading while their applications being assessed. According to the FCA, the status does not deem them “fit and proper”.
The FCA said 51 firms have withdrawn their applications for registration and can no longer trade. It also said that the firms that do register are subject to FCA enforcement.
The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom. However, it operates independently of the UK Government, and is made its income by charging fees to members of the financial services industry. The body regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the UK.
It regulates the conduct of retail as well as wholesale financial services firms. Like its predecessor the FSA, the FCA is constituted as a company limited by guarantee.
