UK Regulator Extends Registration Deadline as Companies Fail AML Test
The U.K.’s Financial Conduct Authority (FCA) is extending the deadline for its Temporary Registrations Regimes (TRR) until March 2022.
The TRR is intended for crypto asset firms that registered with the regulator before December 2020. These firms could then apply for the TRR, so they could continue trading, while the FCA assesses their applications. The original deadline for the TRR was July 9, 2021.
The FCA said it was extending the deadline because many businesses were not meeting the required anti-money laundering standards. As a consequence, “an unprecedented number of businesses” had withdrawn their applications. The FCA emphasized that although this wouldn’t be the only element it would assess, it would only register firms that met these standards.
Consumer protection
In the announcement, the regulator felt compelled to issue a warning regarding consumer protection. It emphasized that crypto assets are highly speculative, meaning they can potentially lose their value very quickly. The FCA warned that consumers investing in crypto assets “should be prepared to lose all their money.”
Even for firms that are properly registered, the FCA noted that these companies are not responsible for providing client protections on the crypto assets. The regulator also emphasized that these consumers would likely be ineligible for any compensation on these crypto assets.
Crypto regulation in the U.K.
These sentiments have largely been echoed by Bank of England Governor Andrew Bailey, who is apparently not a fan of cryptocurrencies himself. He also stated explicitly that those investing in crypto should be “prepared to lose all [their] money.” Later on, Bailey acknowledged that cryptocurrencies had “huge enthusiasm,” but, in his mind, this made them “dangerous.”
Meanwhile, there are other voices in Britain that differ markedly from this official position. For instance, U.K. financial lobbyist TheCityUK is pushing for greater protection regarding crypto assets to attract more crypto-focused companies to London. Instead of merely demonizing the growing asset class, the lobbyist encourages officials to rationally regulate it.
The CEO of crypto product provider ETC Group Bradley Duke also shares this perspective. He feels that the U.K. would logically be at the center of this business. But when attempting to list his company’s bitcoin (BTC) exchange-traded product (ETP) on the London Stock Exchange, he said his business felt unwanted by the regulator. ETC Group instead listed its ETP on London-based alternative trading system Aquis Exchange.
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