Meta: If you are interested in finding out whether or not crypto firms have been meeting the FCA’s anti-money-laundering rules in the country, continue reading.
In recent years, cryptocurrency has exploded into the mainstream and encouraged a growing number of both experienced and inexperienced investors to get involved. If you are familiar with one of the fastest-growing digital trends of the technological age, you may be aware of the importance of these organisations adhering to anti-money-laundering laws and the consequences of being found guilty of failing to respect industry-wide rules and regulations. If you are curious as to whether or not crypto firms are, as a whole, meeting AML rules, continue reading.
A widespread wave of withdrawals
It has been reported that a growing number of crypto firms have begun withdrawing their applications to register with the Financial Conduct Authority after failing to source a suitable compliance solution and meet the company’s strict anti-money-laundering standards. In response to this news, the country’s conduct regulator has announced that it has extended the due date for its Temporary Registrations Regime for cryptocurrency-based businesses in an attempt to allow companies to continue to trade whilst their applications are being judged. In addition, crypto firms that fail to register with the regime, or the FCA, but continue to illegally trade run the risk of being punished by the full force of their criminal and civil powers. It has also warned customers of the unstable nature of cryptocurrency trading and issued a reminder that they should be prepared to lose a considerable amount of money with no access to compensation schemes regardless of whether or not a firm is partially or fully registered with the FCA.
A sign of a much larger problem
It may have only recently been reported but the ongoing trend of crypto firms failing to meet AML rules is a sign of a much larger problem that has plagued the country’s cryptocurrency industry for a number of years. In recent years, the illicit use of crypto has also emerged as a growing problem on a global scale with concerns raised as early as last year and a number of government figures previously calling for stronger global regulation of cryptocurrency. This comes as some of the most popular cryptocurrencies, including Bitcoin, were found to have been used in a wide range of money-laundering activities as a result of a series of loopholes that allows these operations to fly under the radar. In the past couple of months, however, changes have been implemented and standards appear to have approved but whether or not this is on a long-term basis is yet to be understood.
Slow but steady progress
It may have been announced in January that crypto firms must register with the FCA but to date, only five have done so on a permanent basis and 90 have done so on a temporary basis. This has allowed them to continue to trade but the FCA has stressed that this does not necessarily mean they are fit to legally trade on a permanent basis. In addition, up to 64 firms have withdrawn their applications for registration and, as a result, can no longer trade in the country.
In the past year, the country’s conduct regulator, the FCA, has required all crypto firms to register in order to continue trading legally. It has, however, led to a growing number of companies withdrawing their applications to register on a permanent basis by failing to meet their strict anti-money-laundering rules and regulations. It also points to a much larger problem of the illicit use of crypto on a global scale but, on the whole, slow but steady progress appears to have been made with strict punishments enacted for those that fail to comply or continue to trade illegally.
