UK FCA Develops Temporary Crypto Registration Scheme Due to Backlog

UK FCA develops temporary crypto registration scheme due to backlog. The United Kingdom Financial Conduct Authority has provided provisional registrations to crypto-asset companies that have already submitted applications but have not yet been processed.

According to a Dec. 16 announcement, this will permit the companies to continue trading for an extended period until July 9, 2021, after the initial registration deadline of Jan. 10, 2021.

The FCA became the Supervisor of Anti-Money Laundering and Counter Terrorist Funding for Crypto Companies in the United Kingdom on January 10, 2020. From that date onwards, all such companies had to comply with the AML Regulations, requiring them to be licenced by January 10, 2021.

However, due to issues with site visits during the pandemic and what it describes as “the complexity and standard of the applications received,” the FCA has so far not been able to process all of the applications.

Accordingly, it granted temporary registrations to all companies which submitted an application before 16 December, providing for an additional six months to process them. The extension applies only to companies that did business before January 10, 2020, while every new company would need complete registration.

One firm that has received a temporary registration commented on the lack of clear requirements being an issue when filing its original application. Sergey Zhdanov, chief operating officer of Exmo, added “We have some experience in getting an AEMI license (electronic money institution). It’s not exactly a piece of cake, but during that process the FCA tells you what is wrong or right and what you need to improve to get the license. Here we didn’t have that luck.”

The FCA is advising all customers of crypto asset firms to check whether the firm is on the register, has temporary registration or can continue to trade due to being registered in a different country.

Any company not falling into one of these categories will be operating illegally if it continues to trade after Jan. 10, 2021, so customers are advised to withdraw both crypto assets and money from such businesses before this date.

In October of this year, the FCA enacted a ban on all cryptocurrency derivatives products, such as futures, options and exchange-traded notes to retail customers due to the alleged “harm they pose.”

[image: Susan Yin]

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