A number of cryptocurrency companies could disappear within days, the British are worried

From 31 March, companies providing cryptocurrency services in the UK will be required to register with the Financial Conduct Authority (FCA), which will also be responsible for monitoring how anti-money laundering companies deal with digital devices. Cryptodevices are popular with many people because their trade is not so regulated. For this reason, they are often attempted by bodies specializing in terrorist financing, drug dealers, or other people engaged in illegal activities. Even so, most cryptographic investors are simple people looking for just a good investment opportunity that is independent of the old type of banking system.

Last year, the UK regulator extended the deadline for supervisory registration, allowing companies on the temporary register to continue trading until they have obtained full authorization. According to the FCA, several cryptographic companies withdrew their applications because they did not meet anti-money laundering regulations.

You can even drop Revolut

Now that there are only days to go before the new deadline expires, the fate of companies on the temporary register – including the $ 33 billion fintech company Revolut and Copper, a cryptostart that counts Philip Hammond as a former British finance minister as an adviser – is pending.

Many industry insiders have voiced frustration with FCA’s cryptographic registry management. One lawyer who advised cryptocurrencies on the applications said the CNBCthat the regulatory authority was slow to approve requests and often did not respond. Many other market participants have reported similar impressions.

“The process was a complete disaster on the part of the FCA,” the lawyer told CNBC who asked for anonymity because of the sensitive nature of the case.

An FCA spokesman said it had approved only 33 cryptocurrency applications so far. More than 80 percent of the companies judged so far have either withdrawn their application or denied it.

“We have found that the majority of cryptographic companies applying for registration do not meet the standards there, which helps ensure that companies are not used to transfer and / or disguise the proceeds of crime,” the spokesman said.

“Companies that do not meet the expected benchmark can withdraw their application. Companies that choose not to withdraw their application have the right to appeal our rejection decision, even in court, ”the authority said.

The cryptocurrency operated by Gemini, Tyler and Cameron Winklevoss was among the first companies to be approved by the FCA. They claim to have always tried to trustto provide customers with a guarantee that they are doing business with a company that has been subject to strict controls.

Companies that really have a desire to apply for regulatory approvals receive a rating that is a key differentiator

The management of the company said.

Everything is too strict

According to Mauricio Magaldi, global strategy director for cryptography at Fintecht Consulting 11: FS, the UK is currently at risk of lagging behind the US, the European Union and other regions due to its current regulatory direction.

He hinted that last week President Joe Biden signed an implementing regulation calling for government coordination on oversight of digital currencies, while EU lawmakers recently voted down a proposal that would have effectively banned bitcoin mining in the bloc.

“While larger jurisdictions notice the opportunity and the risk, the UK emphasizes the risk,” Magaldi told CNBC. According to him, these companies will remain popular even after they leave the UK market, in return this cannot be exploited as they become inaccessible.

Industry fears that this could put the UK at a disadvantage at a time when the country wants to become a global leader in financial innovation after Brexit. The country has a thriving fintech industry that attracted nearly $ 12 billion in investment last year.

However, fast-growing fintechs such as Revolut and Copper may soon be forced to close their cryptocurrencies in the UK and move to offshore if they fail to fully comply with regulations. Companies like PayPal and Coinbase that sell cryptocurrencies in the UK through overseas subsidiaries are not affected.

This could be a blow to the whole crypt world

Cryptodevis have received more attention in recent weeks because of the Russo-Ukrainian war: many believed that more affluent oligarchs in Russia and the state would try to evade sanctions with gray-eared, hard-to-trace cryptocurrencies. Because of this, markets have both priced in a surge in traffic to tokens and feared they could tighten regulation.

There are many sanctioned Russian oligarchs in the UK holding their assets, so it may be harder for them to use this tool. Although some analysts say cryptocurrencies are not suitable for this purpose, they can track transactions much more accurately if they have the will.

(Cover image: Matt Cardy / Getty Images HUngary)

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