‘Significant’ share of crypto firms not meeting money laundering standards: British regulator
Since a large number of cryptoassets firms are not meeting the required standards under the Money Laundering Regulations, the FCA said that this has resulted in an unprecedented number of businesses withdrawing their applications under the Temporary Registration Regime (TRR).
The British regulator added that it will extend the end date of TRR for the existing cryptoasset businesses from 9 July 2021 to 31 March 2022. Established last year, the TRR will allow exiting crypto firms that applied for registration before 16 December 2020, whose applications are still being assessed, to continue trading. The extended date will allow cryptoasset firms to continue their business while the regulator carries out its assessment. The FCA said that it would register only those firms which have the processes in place to identify and prevent anti-money laundering activities.
The FCA also warned investors that many cryptoassets are highly speculative and can lose value quickly, adding that the regulator does not have consumer protection powers for these activities. Even if the firms are registered with the FCA, the regulator stated that it is not responsible for ensuring that cryptoasset businesses protect their clients’ interests. “It is unlikely that consumers will have access to the Financial Ombudsman Service or Financial Services Compensation Scheme, irrespective of whether a firm has temporary or full registration,” said the FCA.