Crypto Unregistered Firms were Warned by U.K. Regulators

Crypto Unregistered Firms were Warned by U.K. Regulators

The United Kingdom’s Financial Conduct Authority (FCA) warned 111 crypto firms that are making illegal transactions. In addition, the regulatory board said that these entities are a “very real risk” and called out investors who might be dealing with unregistered firms to be careful.

Since January 10 of this year, all UK-based crypto companies have been mandated to comply with the country’s Laundering and Counter-Terrorist Financing Laws. Also, they have to register with the FCA to operate legally in the country. However, a lot of crypto firms haven’t done this so far.

On June 22, Tuesday, the FCA’s head, Mark Steward, said that the unregulated crypto entities are posing a threat to consumers, banks, and payment firms who do business with them.

Lists of illegal crypto firms were released so that investors could double-check if a business they are dealing with is non-compliant.

In light of the flaming popularity of cryptocurrency in the UK, the financial watchdog is being extra vigilant. According to its recent survey, 2.3 million British adults are now holding crypto.

The operational struggles from the country’s strict anti-money laundering laws might be delaying a lot of these unregistered crypto firms.

On June 4, FCA released a record that 51 digital asset companies had pulled out their applications. According to the UK government, it is actively trying to curb criminal behavior which uses cryptocurrencies, such as money laundering and terrorism financing.

Earlier this month, the London Metro Police asked for legislative change that will empower authorities to approach crypto-like cash-based crime. In addition, it asked the legislature to allow the freezing of crypto assets from businesses and individuals who undergo police investigations. Moreover, it requested rigid regulations that will give a hard time for criminals to make a crypto transfer.

UK Crypto Regulations

Last January, the FCA took a highly cautious approach to cryptocurrency as it banned crypto-derivatives platforms. Also, it warned investors of the risks associated with dealing with digital assets. The agency was appointed as the supervisor of the Anti-Money Laundering and Counter-Terrorist Financing measures.

Crypto companies that started operating in the country before that date had to apply for a Temporary Registration Regime, which allowed them to proceed in trading. It was done while the FCA was processing and assessing their full registrations.

However, a lack of onsite registration due to the COVID-19 pandemic led to a backlog of applications that are still being processed. Due to this, FCA announced on June 03 the extension for the final date of temporary registration from July 2021 to March 2022.