UK Regulator Extends Registration Deadline For Few Crypto Firms

Key Insights:

• FCA extends the temporary registration deadline for 12 crypto firms.
• UK’s regulator has set April 1 deadline for all other crypto firms to register.
• The watchdog has approved 33 applications, and over 60 have either been rejected or withdrawn.

On Wednesday, the UK’s Financial Conduct Authority (FCA) announced the extension of the temporary registration deadline for 12 crypto businesses.

Temporary Registration Regime

The watchdog intended to close its temporary registration regime (TRR) for crypto-asset firms on March 31. As of Tuesday, the regulator said that there are 12 companies on the temporary register that will have to suspend their services if they fail to secure approval by the deadline.

Per an update by the regulator today, the 12 companies would be allowed to continue trading using temporary licenses until the given extended deadline.

“The TRR will close on 1 April, for all but for a small number of firms where it is strictly necessary to continue to have temporary registration.”

However, FCA noted that the extensions might be necessary where a business pursues an appeal or has particular winding-down circumstances.

Some of the firms with temporary registration include Revolt, Copper Technologies, Blockchain.com, CEX.IO, among others.

The regulator previously announced that it would forcefully terminate crypto companies in the UK without permanent licenses by April 1. The regime aims to prevent money laundering and the financing of terrorism.

Though the 12 crypto businesses received an extension in their registration deadline, the financial authority clarified that this “does not mean that the FCA has assessed them as fit and proper.”

The extension comes amid criticisms from UK lawmakers on firmly sticking to the April 1 deadline. Early this year, a Treasury Committee report commented on the crypto-asset registrations being “too slow.” It said,

“The FCA should not extend the deadline for registration again beyond March 2022. If the FCA sees no alternative, it should write to the Committee to explain its position.”

Crypto Firms Get Booted From the UK

The regulator’s stringent yet slow approach has triggered several crypto businesses to exit the country, irking the crypto industry and users.

So far, the FCA has only approved 33 crypto firms’ applications out of over 100 firms that came forward to register. Over 60 firms have either been rejected or withdrew their applications.

Crypto payments app Wirex has become the latest to withdraw its application from FCA’s temporary registration regime ahead of the deadline.

An executive from a crypto business that opted out of the UK to relocate elsewhere in Europe told Financial Times,

“We decided some time ago to say ‘screw them.’ I have been the biggest fan of the FCA over the years. They were the gold standard of regulation. But no longer.”

In 2021, the regulatory body booted Binance and its operations from the UK, stating it is not authorized to operate in the country.