UK Crypto Businesses Could Cease Operations After Failing To Meet AML Rules

The Financial Conduct Authority (FCA) has announced that a “significantly high number” of crypto firms operating in the UK are failing to meet current anti-money laundering (AML) rules.

The regulator pointed out that up to 50 companies dealing in crypto had withdrawn applications for the Temporary Registrations Regime (TRR) issued last year. The permit allowed crypto service providers to continue trading until the FCA could formally approve or reject their operations.

We are extending the Temporary Registrations Regime for existing #cryptoasset businesses from 9 July 2021 to 31 March 2022 https://t.co/EFH55WRR7v

— Financial Conduct Authority (@TheFCA) June 3, 2021

 

In their latest statement, the FCA asserted that crypto startups that pull out of the TRR scheme must halt all trading operations immediately. These businesses will remain suspended until they meet the regulator’s criteria and are added to the FCA’s formal register.

Crypto platforms that refused to stop trading could face heavy fines or lawsuits by the FCA. That said, not all of the 50 firms that have withdrawn from the temporary scheme are covered by the FCA’s rules to register, meaning that some may not be forced to cease trading.

The government agency noted that it would focus on whether a crypto company falls short of AML standards before approving its operations, adding:

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

Cracking Down On Crypto Businesses

The UK financial watchdog has warned on several occasions that cryptocurrencies such as bitcoin are highly speculative and prone to market dumps. 

The agency insists that its counter-terrorist financing and AML legislations are meant to protect UK citizens against bad actors who seek to fund terrorists or transfer and disguise funds from illicit activity.

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