Amidst the rapidly evolving landscape of cryptocurrency, the UK’s dominant financial overseer, the Financial Conduct Authority (FCA), has come forward with intriguing revelations about the registration rates of cryptocurrency firms within its borders.
And let’s be honest here, the numbers are surprisingly, if not alarmingly, low.
A Dismal Approval Rate
Zooming in on the figures since January 2020, a whopping 291 digital currency enterprises knocked on the FCA’s door, seeking the golden ticket to operate within the UK.
Yet, a mere 38, which equates to a paltry 13%, managed to clear the hurdles and secure their spots. While these figures might seem startling to the uninitiated, let’s peel back the layers and dive into what’s truly happening behind the scenes.
The FCA isn’t just playing gatekeeper on a whim. There’s a method to their strictness. According to a response that the FCA published in August, addressing a right-to-know inquiry, the majority of applications, specifically 155 of them, were willingly pulled back by the applying companies.
Why? It seems the FCA isn’t shy about suggesting a resubmission if the initial applications don’t precisely tick all their boxes. But it’s not just about dotting I’s and crossing T’s.
If you’re a firm with the ambition to ride the crypto wave within the UK, you must fulfill the criteria set under regulation 57 of the MLRs. Fall short? Expect the cold shoulder.
No exceptions. It’s a firm indication that the UK is holding its ground when it comes to maintaining the integrity of its financial landscape.
Keeping the Crypto Players in Check
It’s not just about jumping on the crypto bandwagon; once on board, there’s an obligation to stay on the right side of the rules. Some learned this the hard way. Notable platforms like Binance Markets Limited were handed a stop sign, being told to cease their operations in the UK.
And if you’re thinking of setting up a crypto ATM in the region, think twice. Some who ventured down this route received stern “halt or prepare for consequences” warnings.
Checking the FCA’s present list of registered crypto asset providers showcases names such as Skrill, eToro, and Gemini. A mix of old stalwarts and new players, but the list’s exclusivity is glaringly apparent, with just 42 names gracing it.
But wait, there’s more. For those who’ve managed to nab their spot, they can’t rest on their laurels.
This past July, the FCA made its expectations crystal clear for all cryptocurrency firms nestled within the UK: Align your promotional strategies with the FCA’s financial marketing regulations. And they’ve set a deadline, ticking down to October 2023.
Moreover, in an earlier directive, the FCA advised crypto enterprises to rethink their marketing game. They should incorporate a ‘breather’ phase, allowing potential investors adequate time to weigh the potential perils of funneling their money into digital assets.
The FCA’s message? Prioritize clarity and caution.
The takeaway? The UK’s approach to cryptocurrency is unapologetically stringent. Their tight leash on the industry is both commendable and contentious.
While the FCA’s rigid stance safeguards potential investors and maintains market integrity, one can’t help but wonder if such rigorous gatekeeping might deter future innovators from exploring opportunities within the UK’s crypto realm.
