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Home»BITCOIN NEWS»UK FCA rejects 90% of new cryptocurrency companies
BITCOIN NEWS

UK FCA rejects 90% of new cryptocurrency companies

By Crypto FlexsSeptember 7, 20244 Mins Read
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UK FCA rejects 90% of new cryptocurrency companies
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According to the Financial Conduct Authority (FCA), around 90% of cryptocurrency companies that applied to register in the UK last year were rejected. Regulatory Authority’s Annual Report for 2024.

High rejection rates result from: The companies Especially if you do not meet the required criteria. Related fields Anti-fraud and anti-money laundering protocols. The FCA said only four of the 35 cryptocurrency companies submitted applications in the past 12 months were approved.

The report details that 15 applications were withdrawn and nine were rejected outright for failing to properly comply with regulatory requirements. “Over 87% of cryptocurrency registrations were withdrawn, rejected or denied due to weak money laundering controls,” the report states.

Explore: Where will Bitcoin be accepted in 2024? List of 20+ major companies

Your submission is missing required components.

at Separate feedback statementThe regulator noted that several submissions lacked the essential elements necessary for proper evaluation. Some were also invalidated for the following reasons: Poor quality Submissions.

Try hard To ensure greater consumer protection, the FCA will introduce new “financial advertising boundaries” in June 2023, aimed at making cryptocurrency advertising more transparent, fair and non-misleading.

The report also noted that British citizens are becoming more cautious about investing in cryptocurrencies. According to the FCA, 63% of consumers who reported fraud did so before investing, up 5% from the previous year.

🚨 Just in: The UK FCA reported that 87% of cryptocurrency company applications did not meet standards. Of the 35 #BinancePayPal, Nomura, Komainu are approved. #1Bitcoin #Cryptocurrency pic.twitter.com/jGSzFBJ00V

— Open4Profit (@open4profit) September 5, 2024

Despite these efforts, international law firm Reed Smith has warned that cryptocurrency companies may look outside the UK for more favorable regulatory environments.

The company cited the lengthy registration process, with an average waiting time of 459 days, and a perception that the FCA lacks political support to process applications in a timely manner. Since 2021, 186 applications have been withdrawn.

“If it is true that the decline in applications is because crypto firms have essentially given up waiting and started looking overseas, then this should send a clear warning about London’s competitiveness,” said Reed Smith partner Brett Hillis.

Explore: Buy and Use Bitcoin Anonymously Without ID (Updated 2024)

UK to Strengthen Regulatory Oversight of Cryptocurrency Companies

The UK has stepped up its regulatory oversight of the crypto sector following several high-profile corporate failures last year. Last year, the Financial Conduct Authority (FCA) introduced new rules requiring all crypto companies to register with the financial regulator.

Additionally, these companies will need to have their marketing materials approved by an FCA-authorized body. One of the key updates is that cryptocurrency exchanges will need to issue clear warnings to customers about the risks associated with investing in digital assets.

FCA has I gave a warning to both of them. Domestic and international exchanges operating in the UK have warned that non-compliance could result in serious consequences. Potential penalties include an unlimited fine and up to two years‘ Failure to meet regulatory requirements carries a prison sentence.

Editor’s Note: Is Britain’s FCA an old-school club?

It is no secret that the UK’s Financial Conduct Authority has a reputation as an ‘old boys’ club’. Indeed, the revolving door phenomenon between the City of London and the Financial Conduct Authority has been well known over the past few decades.

With the introduction of new crypto laws last year that focus on cryptocurrency marketing, the new regulatory framework appears to be helping achieve what many experts feared would happen in 2023: excluding small businesses.

Given the requirement that only ‘accredited investors’ hold a cryptocurrency license, it’s no surprise that most applications (mainly from home developers and ambitious young startups) are rejected.

This could be an attempt to balance out the chaos that erupted in 2021 when TradFi players in the City of London felt left out by the massive retail boom.

Despite this, many in the UK crypto industry still believe that the FCA’s attempts at ‘investor protection’ (including a cat-and-mouse approach to closing UK retail customers’ access to derivatives trading) will stifle future crypto innovation in the UK and push crypto entrepreneurs and traders overseas.

Explore: Buy Bitcoin with PayPal (Beginner’s Guide)

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes only and does not constitute investment advice. You may lose all your capital.

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