16 Crypto Firms May Have to Shut Down in the U.K. Next Week
Last year, FCA, the U.K. regulator, extended the deadline allowing firms on a temporary register to continue trading while applying for full authorization, with the option to close the operation once the deadline passes. The FCA said many crypto companies had withdrawn their applications as they were not meeting the required anti-money laundering standards.
As of the 26 of March 2022, Sixteen crypto companies may be forced to shut down in the U.K. in one week.
The businesses, which include Revolut, Wirex, Copper, Blockchain.com, Cex.io, and Coinburp, are only temporarily registered with the Financial Conduct Authority. Unless they receive full authorization to operate by March 31, they'll likely have to move their businesses to another jurisdiction.
This looming deadline is especially painful for Revolut. This fintech firm reached a valuation of $33 billion during a funding round last summer, as it would no longer be allowed to offer crypto services to U.K. citizens.
The company has more than 18 million users in over 35 countries and enables consumers to purchase cryptocurrencies like Bitcoin and Ether, with minimum trades set at just $1.
Revolut lets users link their banking apps to round up their spare change and invest it in digital assets.
Copper is another big name affected, and former chancellor Philip Hammond recently joined the company as an advisor.
The FCA unveiled the temporary registrations regime so crypto companies could continue trading while the City regulator performed a "robust assessment." Many of these firms have pending applications.
This regime was originally meant to end on July 9, 2021 — but last June, it was extended to the current date of March 31, 2022.
Plasbit is not registered in the U.K. and is not obligated to follow the FCA guidelines and regulations as part of our belief to be fully independent and our customers are not affected by the latest developments whatsoever.
FCA, we have a problem
Several crypto firms are fully registered with the Financial Conduct Authority, which means they won't be affected by this looming deadline.
They include the Winklevoss twins' exchange Gemini, Fidelity Digital Assets, Uphold, eToro, Skrill, and Paysafe.
Crypto platforms registered overseas — including PayPal, Plasbit, and Coinbase — will also be able to continue operating as normal.
According to CNBC, several crypto companies attempting to join the full register have expressed exasperation with the application process and have accused the regulator of being slow and unresponsive.
An FCA spokesperson said it had approved just 33 crypto firms’ applications. More than 80% of the firms it has assessed have either withdrawn their applications or been rejected.
“We’ve seen a high number of the crypto assets businesses applying for registration not meeting standards there to help ensure firms are not used to transfer or disguise criminal funds,” the spokesperson said.
There are fears that this inflexible regulatory stance could ultimately hurt the U.K. as it attempts to build a competitive advantage following the vote to leave the European Union.
While the crypto industry is one of the fastest-growing spaces in the world, the advent of the new registration criteria by the FCA could affect the space as companies unable to complete their registrations may be forced to move their operations offshore.
