A slew of crypto firms could be forced to wind down their business in the UK if they fail to register with the finance watchdog ahead of a key deadline next week. Several of the UK’s best-known crypto businesses, including payments app Revolut and custodian Copper, are among the groups left in limbo.
Many crypto companies will be forced to leave the UK if they do not register with the Financial Conduct Authority (FCA) by March 31st, CNBC is reporting with reference to local business.
According to the media, fintech companies such as Revolut and Copper are in limbo. So far, these companies (like most crypto businesses) operate under the terms of temporary registration in the FCA registry. Many industry representatives expressed dissatisfaction with the way the regulator treats the cryptocurrency business in a comment to CNBC.
For example, a lawyer, who spoke on condition of anonymity, stated that the regulator is very slow in approving applications, and often does not respond to requests at all. His position is confirmed by other representatives of the crypto market in the UK, writes CNBC.
Last year, the FCA extended the deadline for provisional registration from July 9, 2021, to the end of March 2022. Then the reason for the increase in terms, according to the regulator, was the “unprecedented number” of rejected applications due to non-compliance with anti-money laundering legislation.
At the same time, the FCA emphasized that they would register companies only if they were confident that “processes are in place to detect and prevent [anti-money laundering] activities.” What kind of processes are involved is still unclear.
A spokesman for the financial regulator said in a comment to CNBC that only 33 applications from crypto firms have been approved so far. At the same time, about 80% of companies that applied for registration either withdrew their applications over time or were refused.
50+ crypto firms to review their ads
Meanwhile, over 50 cryptocurrency companies have been sent enforcement notices by the UK’s advertising watchdog as part of a regulatory crackdown on promotions in the industry.
The Advertising Standards Authority said it has told the firms to review their ads and make sure they are in compliance with the rules. It also threatened firms with targeted sanctions if “problem ads” persist after May 2.
This would include reporting non-compliant advertisers to the Financial Conduct Authority.
In its notice to the companies, the regulator gave guidance stating advertisers must make clear digital assets are unregulated in the UK Firms must not urge people to buy bitcoin or another cryptocurrency in their ads, or create the “fear of missing out” on an investment, the ASA added.
The ASA didn’t name the companies it has contacted but said it has previously banned ads from the likes of crypto platform Coinbase and pizza chain Papa John’s over concerns they misled consumers.
“This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible,” the ASA said in a statement.
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