Strict anti-money laundering laws in the United Kingdom are becoming a major operational hurdle for crypto firms in the country.
According to the UK Financial Conduct Authority (FCA), many crypto businesses in the country may be preparing to exit.
in a release issued On Thursday, the regulatory agency disclosed:
“A significant number of businesses are not meeting the standards required under the Money Laundering Regulations. This has resulted in an unprecedented number of businesses withdrawing their applications.”
according to a report good By The Guardian, 51 companies have so far failed to meet FCA’s AML standards and may be forced to cease operations in the country.
By withdrawing their license applications, these crypto firms must prevent all crypto-related services or risk fines and legal action by the FCA. Such businesses can resume operations only after satisfying the AML protocol of the FCA after which they will be put on the watch list of registered cryptocurrency firms.
As previously reported by Cointelegraph, FCA Extends Its Temporary Registration Regime for crypto businesses July 2021 by March 2022. This nine-month extension is reportedly to give the FCA enough time to clear its backlog of pending licensing applications.
The FCA reportedly has 90 pending registration requests with only five duly registered crypto businesses in the UK, meanwhile, some of the 51 companies that have withdrawn their licensing applications may not be covered by the FCA’s AML rules which means that their actions may not result in a mandatory shutdown. .
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.
Back in January 2020, The FCA Becomes the AML Police for the UK’s Crypto Market Marking the beginning of mandatory business registration for cryptocurrency firms in the country.