- UK crypto companies have to submit registration applications by June 30
- Any crypto-handling entities operating without a license after January 10, 2021, will be shut down
- AMLD5 regulations have pushed the FCA to act quickly in closing crypto loopholes
UK crypto companies have just one week to submit their registration applications to the Financial Conduct Authority (FCA) or face closure next year. The FCA has ordered all British-registered companies dealing in cryptocurrencies to have licenses in place by January 10, 2021, but has warned that the length of the review process means that applications have to be in by June 30, 2020, with those that fail being shuttered after the deadline.
UK Crypto Companies Get a Wakeup Call
The FCA, which governs the UK’s efforts against money laundering and terrorism financing, was given extra powers at the start of the year with regard to cryptocurrencies following the implementation of Fifth Money Laundering Directive (AMLD5) in the country. The FCA has worked quickly to regulate the UK crypto industry in line with the new directive, which they hope will tackle what blockchain analysis firm CipherTrace recently called a “pervasive presence of Russian dark markets on UK exchanges.”
Companies still active without a license after January 10 next year can look forward to having the businesses shut down immediately and a fine, with the perpetrators potentially facing a prison sentence if the FCA can prove that those businesses were involved in illegally funding criminal organizations.
FCA Steps Up Its Game
The FCA stepped up its game in 2018 in response to a glut of UK crypto crimes following the 2017 blockchain boom, with 67 firms investigated and 39 of the 49 resolved cases ending in warnings for consumers. Last year the FCA cracked down on cryptocurrency derivatives products and ETNs following concerns that consumers were losing money because they either didn’t understand the products or the companies offering them were not doing so in a fair way.