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Crypto Firms’ Registration

Author: Dr. Angelika Hellweger  30 May 2024

Angelika Hellweger of Rahman Ravelli considers the figures for cryptocurrency firms registering with the Financial Conduct Authority.

Fewer than one in seven cryptocurrency firms have been successful in registering with the Financial Conduct Authority (FCA).

High risk of money laundering has been cited as the main reason why only 47 companies out of 344 that applied were successfully registered between January 2020 and April this year.

The FCA figures show that of the 344 applications, 233 were withdrawn, 48 were rejected and decisions on 16 were still pending at the time the data was produced.

The latest annual Treasury report on efforts to tackle money laundering and terrorist financing says the FCA’s robust assessment of firms “identified significant weaknesses’’ in money laundering controls. This led to “a large number of companies withdrawing their applications or being rejected or refused by the FCA’’.

The figures emphasise the high standard that the FCA is demanding of firms that are looking to provide crypto-related services. The FCA has been the anti-money laundering supervisor for crypto businesses in the UK for four and a half years.

But its stance may be at odds with the government’s often repeated aim of making the UK a global hub for crypto.

The FCA’s cautious approach to crypto has not always been welcomed by government ministers. Economic Secretary to the Treasury, Bim Afolami, has stated that while the FCA is broadly “working with us’’, he has argued that the FCA risks undermining the entrepreneurial spirit that is behind much of the crypto sector.

It is vitally important that the FCA strikes the right balance in the future. One the one hand, it needs to uphold high standards, which ultimately protect the overall crypto market and those investing in it. But on the other hand, regulation should not endanger the entrepreneurial spirit of the crypto world and the advantages that can bring. 

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Dr. Angelika Hellweger

Legal Director

angelika.hellweger@rahmanravelli.co.uk
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Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.

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