- Out of 291 crypto company applications since 2020, only 13% received FCA approval.
- The majority of applications were self-withdrawn, with the FCA’s encouragement for reapplication.
- Crypto firms in the U.K. must adhere to the FCA’s updated financial promotions regime by October 2023.
The Financial Conduct Authority (FCA), the chief financial watchdog in the United Kingdom, has exhibited a cautious approach to crypto business registrations. According to recent data, out of the 291 crypto-based companies that applied for registration since January 2020, a mere 13% secured the requisite permits for operation.
In a disclosure made on August 11, responding to an anonymous right-to-know request, the FCA provided a detailed breakdown of the crypto registration landscape. The data unveiled that the regulator received a significant 291 applications. However, of these, only 38 managed to successfully navigate the stringent application process. Interestingly, a substantial chunk, 155 to be precise, opted to withdraw their applications. The FCA’s rationale behind this statistic lies in its policy to nudge firms to resubmit when the provided criteria aren’t adequately met.
Delving deeper into the specifics, the FCA mentioned,
“Firms must strictly adhere to regulation 57 of the MLRs. If the expected informational threshold isn’t met, the application stands rejected.”
Notably, in the U.K., companies venturing into crypto operations need to either be FCA-registered or have acquired a temporary operational status. This approach isn’t entirely surprising, considering the FCA’s earlier strict action against Binance Markets Limited, urging it to cease its U.K. operations. Moreover, crypto ATM operators weren’t spared either, with many receiving stern warnings to shutter operations or face the consequences. Prominent names on the FCA’s list of crypto asset providers include industry heavyweights like Skrill, eToro, and Gemini.
Further tightening its grip, the FCA, in July, called upon all crypto businesses in the nation to align their marketing techniques with the regulator’s financial promotions protocol by October 2023. This move follows the FCA’s prior recommendation for crypto firms to adopt marketing strategies that grant customers ample time to understand and evaluate the inherent risks of digital asset investments.