In its continuous efforts to fight fraud and improve consumer protection, the UK Financial Conduct Authority (FCA) has taken significant steps in crypto regulation, revealing that over 87% of cryptocurrency registrations were either refused, withdrawn, or rejected. The FCA also introduced new restrictions on marketing cryptocurrency assets in its annual report. In the first half of 2024, the authority issued warnings to consumers about 450 illicit cryptocurrency advertisements, emphasizing its commitment to stricter crypto regulation and international cooperation, along with enhanced supervision of the sector.
According to the FCA’s annual report, 35 applications were received by the Financial Conduct Authority (FCA) in the 12 months ending March 31; only four of them qualified.
Komainu, a joint venture of Nomura that handles cryptocurrency custody, and BNXA, a PayPal U.K. affiliate, were among those that successfully registered as Binance’s payments partner. The remaining ones were either denied a license or rejected for missing essential elements required for evaluation.
FCA Draws Attention to New Crypto Rules to Fight Thefraud
The UK’s main financial regulator, the Financial Conduct Authority (FCA), made major advancements in its regulatory control of the cryptocurrency industry last week when it released its Annual Report and Accounts for 2023–2024. The research focused on new crypto regulations that were implemented to improve consumer safeguards and fight financial crimes involving cryptocurrency.
The FCA disclosed in the report:
Most cryptocurrency registrations—more than 87%—were declined, canceled, or denied.
“We help firms applying for authorization by communicating our expectations and issuing guidance on good and poor practice. This is helping firms understand what is required – 44 crypto firms now have money laundering registration,” the regulator said.
The FCA took notice of the more stringent marketing regulations that were put into effect earlier in 2024 to promote crypto assets. According to these regulations, investors have a 24-hour cooling-off period, and crypto assets are categorized as “Restricted Mass Market Investments.”
According to the FCA, this approach attempts to make sure that cryptocurrency promotions are transparent, equitable, and not deceptive since companies need to follow guidelines that shield customers from potentially risky investments. The regulator emphasized:
“We issued 450 consumer alerts against firms illegally promoting cryptoassets in the first 3 months of the rules going live.”
The study included information on the FCA’s broader efforts to combat financial crime, including notable advancements in industry monitoring. The FCA said that it has implemented additional measures aimed at high-risk enterprises and carried out several supervisory visits since April 2023.
These actions are in line with the FCA’s mission to lessen money laundering and enhance fraud detection in the financial industry, including the use of cryptoassets. The organization reaffirmed that it is still working with international organizations to establish norms for the crypto regulation worldwide. The FCA composed:
“We continue to play a leading role internationally – shaping the global standards on crypto, sustainability, and non-bank finance, to name but a few.”
Since 2020, the FCA has been monitoring the cryptocurrency industry and registering businesses by its anti-money laundering crypto regulations. The regulator is awaiting legislation to allow it to formally grant company operating authorization throughout the nation. It might have to hold out for a while longer. Plans about cryptocurrency were put on hold by the newly elected Labour administration in July.
Just 44 of the 359 applications for cryptocurrency corporations that the FCA has received since January 2020 have been registered.
Conclusion
According to several of the companies that didn’t wind up gaining full FCA clearance, long wait times, a lack of feedback, and—as some firms claimed—unfair treatment by the regulator complicated the registration process. As a result of the long wait times, some cryptocurrency firms have left the nation to register elsewhere and service consumers from abroad who are based in the United Kingdom.
