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The report details that 15 applications were withdrawn and nine were rejected outright for failing to properly comply with regulatory requirements. “Over 87% of cryptocurrency registrations were withdrawn, rejected or denied due to weak money laundering controls,” the report states.
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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 Since 2021, 186 applications have been withdrawn.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.
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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.
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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.