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FCA admits it fails full regulatory oversight on the crypto market

FCA Publishes Warning Against Illegal Crypto Broker Cryptenix
FCA Publishes Warning Against Illegal Crypto Broker Cryptenix

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The number of unlicensed crypto firms in the United Kingdom has continued to grow despite the role taken by the Financial Conduct Authority (FCA) to regulate the crypto sector. The FCA has licensed multiple crypto companies, the latest being Crypto.com.

FCA says it has a limited role in crypto regulations

The FCA has admitted that it does not have full oversight over the entire cryptocurrency sector. It further admitted that it lacks consumer protection powers to protect the rising number of investors in the sector.

The FCA also said it had limited authority to register UK-based cryptocurrency exchanges under anti-money laundering (AML) regulations. It also explained that the temporary registration regime (TRR) was introduced to allow cryptocurrency companies trying to register to receive temporary trading permissions.

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Under the TRR, crypto firms could apply to register with the agency while continuing with their operations. However, after the TRR was eradicated, firms could not operate until they were duly registered.

In an interview with Cointelegraph, a spokesperson from the FCA said that the registration standards it had set were meant to provide a conducive investment environment for investors while supporting innovation in the industry.

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Registered crypto firms in the UK

The number of unregistered digital asset firms in the UK has risen significantly over the past few years. So far, the FCA has given full registration status to 37 companies in the country.

Only seven companies have undergone the registration process this year. The companies have fully complied with Money Laundering regulations, including eToro UK, Zodia Markets (UK) Limited, DRW Global Markets LTD, Wintermute Trading LTD, Crypto.com, and more.

The FCA has also provided a list of UK-based firms that have continued to offer crypto asset services without the proper registration from the FCA for an anti-money laundering (AML) approval. The list is extensive and mainly features the companies that provide cryptocurrency trading and foreign exchange firms.

The FCA introduced new cryptocurrency regulations in January 2020. The regulations were meant to allow the FCA to supervise firms operating in the cryptocurrency industries and enforce AML and counter-terrorism financing measures.

Crypto companies operating in the UK have been given at least one year to submit applications to be eligible for the TRR registration. However, the companies were required to seek registration without operating failure, which would be a criminal offense.

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