FCA: UK Crypto Firms Not Meeting Money Laundering Standards

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  • The FCA has said that a large number of crypto firms are still failing to meet money laundering standards
  • The authority has extended its registration scheme for eight months following mass withdrawals
  • The FCA is worried about crypto companies operating illegally after withdrawing

The Financial Conduct Authority (FCA), the UK’s financial watchdog, has warned that British crypto firms are failing to meet anti money laundering standards and has extended a temporary registration scheme for another eight months. In an update posted on their website, the FCA said that the scheme is being extended to help cryptocurrency firms meet the standards following the withdrawal of a large number of companies who feared they would not make the July deadline.

Crypto Businesses Still Not Meeting Requirements

In the notice, the FCA said that “a significantly high number of businesses” are still not meeting money laundering standards and all but admitted that the process is too onerous for crypto companies, noting that “an unprecedented number of businesses” have withdrawn their applications in the lead up to the deadline.

This has left the FCA in a quandary – just because the companies have withdrawn their applications it does not mean they will stop trading, which means they will be doing so without clearance from the FCA. As a result the FCA has decided to extend its verification process by another eight months to March 2022 in an effort to help these companies become compliant.

FCA Continues With Regulatory Push

After ignoring it for many years the FCA has been clamping down on UK crypto firms in the last three years; in 2018 the FCA issued consumer alerts for 39 of the 67 crypto firms it investigated, while this year it banned crypto derivative trading for UK users and added
cryptocurrency firms to the list of companies required to file financial crime reports “based on their business activities and the potential money laundering risks.”