FCA Extends Temporary Registration Regime for Cryptoasset Firms


The Temporary Registrations Regime extended end date will allow cryptoasset firms to continue trading while the FCA continues with its assessments.

June 3, 2021 | AtoZ Markets The Financial Conduct Authority (FCA) on Thursday announced extending the end date of the Temporary Registrations Regime (TRR) for existing cryptoasset businesses from July 9, 2021 to March 31, 2022.

The TRR was established last year to allow existing cryptoasset firms that applied for registration before December 16, 2020, and whose applications are still being assessed, to continue trading.

A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations. This has resulted in an unprecedented number of businesses withdrawing their applications.

The extended date allows cryptoasset firms to continue to carry on business while the FCA continues with its robust assessment.

Read also: FCA Reminds UK Crypto Firms to Register Before End of June

Anti-money laundering and counter terrorist financing legislation are aimed at protecting against enabling the transfer and disguise of funds from criminal activity, or funding of terrorist groups.

While this is not the only element that the FCA will assess in relation to an applicant, the FCA will only register firms where it is confident that processes are in place to identify and prevent this activity.

FCA considers cryptoassets high risk

Many cryptoassets are highly speculative and can therefore lose value quickly. The FCA does not have consumer protection powers for the cryptoasset activities of firms.

Even if a firm is registered with the FCA, it is not responsible for making sure cryptoasset businesses protect client assets (ie customers’ money), among other things.

Cryptoassets are considered very high risk, speculative investments. If consumers invest in cryptoassets, they should be prepared to lose all their money.

It is unlikely that consumers will have access to the Financial Ombudsman Service or Financial Services Compensation Scheme, irrespective of whether a firm has temporary or full registration.

Think we missed something? Let us know in the comment section below.

Share Your Opinion, Write a Comment