FCA warns cryptocurrency companies are failing to meet UK AML requirements

The Financial Conduct Authority (FCA) has said a ‘significantly high’ amount of cryptocurrency firms are not meeting UK requirements on money laundering prevention.

CNBC highlighted businesses that offer crypto-related services must register with the FCA, with the financial watchdog introducing a temporary licensing regime for businesses that have not yet had their applications approved to enable them to continue trading.

The FCA noted yesterday that it had pushed back its deadline for the Temporary Registration regime from July 9 this year to March 31, 2022.

Currently, there are only five crypto companies that are registered with the FCA. These include Gemini Europe, Gemini Europe Services, Archax, Digivault and Ziglu. There are currently many firms in the Temporary Registration Regime list.

The FCA remarked in a statement, “A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations resulting in an unprecedented number of businesses withdrawing their applications. The extended date allows cryptoasset firms to continue to carry on business whilst the FCA continues with the robust assessment being undertaken.”

Bank of England Governor Andrew Bailey also commented on cryptocurrencies last month, saying the currency had no intrinsic value and investors should only buy them ‘if you’re prepared to lose all your money’.

NatWest recently revealed it will not accept payments in cryptocurrencies, according to the company’s head of risk Morten Friis. The head implied the board of directors at NatWest were taking their cues from the FCA – who had issued a warning to cryptocurrency customers that bitcoin and other digital assets are risky investments in January of this year.

Three Chinese associations – the National Internet Finance Association of China, the China Banking Association and the China Payment and Clearing Association – also recently called for a complete ban on financial institutions and payment firms providing cryptocurrency services to customers.

Copyright © 2021 FinTech Global

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