The Financial Conduct Authority (FCA) has released new data indicating a significant decrease in cryptoasset registration applications. The agency reported receiving only one application last month, a stark contrast to the 32 applications over the previous 12 months and 365 since January 2020.
According to the FCA, this decline may reflect the challenges faced by crypto businesses in meeting its anti-money laundering (AML) requirements. Since the introduction of these regulations, 38 firms have been successfully registered, while 273 applications have been refused or withdrawn, and 54 remain pending. Some industry leaders have expressed concerns that these practices could discourage legitimate businesses from operating in the UK.
Vlad Tenev, CEO of Robinhood, commented on this regulatory stance in a recent interview with The Times. “The gambling will continue, but suddenly, with crypto and margin trading, we would have a problem with that. That just seems backwards to me,” said Tenev.
The decline in applications may impact the UK government’s goal of becoming a global hub for cryptocurrency and blockchain innovation. Lisa Cameron, former chair of the all-party parliamentary group on crypto, told Financial News London: “It is vitally important that our regulatory processes support good actors to set up and scale up in the UK.”
Regulatory approval in the UK remains challenging for many crypto firms despite investments in compliance. Binance plans to expand its compliance team to 700 staff by the end of 2024 to align with global standards. Similarly, Coinbase has implemented Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to meet regulatory standards. Both companies continue to face challenges under the FCA’s requirements.
The FCA’s cautious approach has been noted by some as potentially affecting the UK’s competitiveness in the evolving digital economy.
