UK MP and Secretary for Economic Affairs at the UK Treasury John Glen stated that few cryptocurrency firms comply with AML rules.
Local cryptocurrency firms are trying to abide by new anti-money laundering regulations set by the UK Financial Conduct Authority (FCA), the official said. However, they experience serious difficulties in registering.
Glen said that as of May 24, only five digital asset firms were licensed by the FCA after the agency was empowered in January 2020. When the FCA began to monitor the activities of cryptocurrency companies, it turned down more than 90% of registration applications. In particular, the regulator rejected applications from 167 companies. Now another 77 companies are awaiting FCA decisions.
The official explained that the department was unable to process and register all applications by the deadline due to the fact that most cryptocurrency firms did not take proper measures to comply with AML rules and did not hire the necessary staff. Therefore, the FCA has once again established an interim registration regime that allows cryptocurrency companies that have applied to the FCA to continue working until July 9.
Glen added that the UK Treasury is working closely with the FCA and industry organizations on cryptocurrency-related issues. The government plans to establish a regulatory system for the industry that would protect users from potential risks, but at the same time would not interfere with the development of innovations.
This year, the FCA has tightened its oversight of the digital currency industry. In March, the agency ordered cryptocurrency firms, including banks, to submit annual reports on the potential risks of financial crime associated with crypto assets. Earlier, the regulator banned British firms from selling cryptocurrency derivatives to retail investors. The prohibition came into force in January 2021.
