Strict anti-money laundering laws in the UK seem to be a major operational hurdle for crypto firms in the country.
According to the UK’s Financial Conduct Authority (FCA), several crypto companies in the country could be preparing to exit.
In a notice released on Thursday, the regulator revealed:
“A significant number of companies do not meet the required standards of the Money Laundering Ordinance. This has resulted in an unprecedented number of companies withdrawing their applications. “
To date, 51 companies have failed to comply with the FCA’s AML standards and may be forced to cease operations in the country, according to a report by The Guardian.
By withdrawing their license applications, these crypto firms will have to stop all crypto-related services or risk fines and legal action by the FCA. Such companies cannot resume operations until they meet the FCA’s AML protocols, after which they are added to the Watchdog’s list of registered cryptocurrency firms.
As previously reported by Cointelegraph, the FCA has extended its temporary registration system for crypto companies from July 2021 to March 2022. This nine-month extension is reportedly intended to give the FCA ample time to clear the backlog of pending license applications.
The FCA reportedly has 90 pending registration applications with only five properly registered crypto companies in the UK. Meanwhile, some of the 51 companies that have withdrawn their license applications may not fall under the FCA’s AML rules, which means their actions may not result in a forced closure.
Companies that fail to meet the FCA’s AML requirements by the end of the registration window will also be forced to refund all customer deposits.
As early as January 2020, the FCA became the AML police for the UK crypto market, marking the start of mandatory company registration for cryptocurrency companies in the country.