Only Five Crypto Firms Are Meeting AML Standards – UK Minister
Following the FCA’s confirmation as the official supervisor on crypto money-laundering activities last year, only five crypto businesses have complied with the FCA AML directives. In addition, a senior official with the financial conduct authority (FCA) has confirmed that most crypto firms in the United Kingdom are struggling to adhere to the authority’s anti-money laundering standards.
On Friday, the economic secretary to the treasury and a member of the parliament, John Glen, observed that crypto firms struggle with the registration process that conforms with the FCA AML’s regulations. Glen further said that the FCA had registered just five crypto firms as of this writing despite being confirmed as the official supervisor of all AML activities in the United Kingdom since January of last year. The five crypto firms are two Gemini Firms, Digivault, Archax, and Ziglu.
Glen remarked that “90% of all assessed firms withdrew their application after an intervention from the FCA. At least 165 crypto-based firms are yet to complete their application process, while applications from 77 crypto firms have not been fully assessed.”
Crypto Firms’ Application Delay
During the week, Philip Davies, a conservative MP for Shipley, West Yorkshire, write to chancellor Rishi Sunak to express his concerns over the continued delays in the FCA’s registration of crypto firms.
The secretary wrote back to Philips saying that most of these crypto firms dont have a solid AML control infrastructure and the right staff members. Hence, the FCA couldn’t process or register their applications before the previous deadline. However, the FCA granted such crypto companies a “temporary allowance” that allows them to keep trading until July 9, 2021, when the FCA will decide what to do with them. So as it stands, such unregistered crypto assets firms won’t know their fate until July 9.
Glen further said that concerns have crypto-related financial transactions have been raised by consumer organizations, industry firms, and associations, and even her royal majesty’s treasury which has been contacting them regularly.
He also said that early this year, her majesty’s treasury even published a referendum on a more comprehensive regulatory structure for digital assets, focusing on stablecoins.
“The goal of any other regulatory framework for digital assets created by the government out of this referendum must provide must balance a possible risk for consumers and the goal of competition or innovation in the crypto space.”
More Crypto-Related Oversight For The FCA
This year, the FCA has increased its crypto-related regulatory supervision. For instance, as of March this year, all crypto firms must submit an annual financial crimes report to the FCA. Before now, the FCA disallowed U.K. Firms from providing crypto-related services such as exchange-traded notes or futures to their retail clients.
Glen concluded by saying, the U.K. Authorities want to enhance the country’s image as a safe and reliable place for starting and growing a digital asset business. Hence, it’s making all efforts to develop a highly dependable AML infrastructure for virtual assets.
Glen’s submissions put to rest the fear that the inability of crypto firms to complete their registration might harm the country’s reputation as a destination of financial innovation – a fear entertained by Davies, his fellow MPs, and lobby groups.
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