Cryptocurrency companies in the United Kingdom could face temporary registration limits to continue their services.
According to the statement, this regulation applies to crypto businesses in the UK that applied for the registration before December 16 this year, and are still pending. “This is to enable those existing businesses to continue to trade after 9 January 2021 until 9 July 2021, pending the FCA’s determination of their application”, said the FCA in their report.
New companies that want to work with crypto-related products – before January 10 – are obligated to register in the FCA before making any operations. But any firm that didn’t apply before December 15, won’t be considered for the temporary registration.
The FCA will conduct criminal investigations on crypto businesses that still operate past the January 10 deadline as a consequence. On a sideline, the company suggested all crypto-users in the UK to actively withdraw their funds before that date, from companies that haven’t applied to the Financial Authority.
Likewise, clients from crypto companies should see if the company they’re currently using can operate under the temporary registration list, or if they are allowed to remain active without proper registration. If any of these conditions don’t apply, it means that crypto-companies will work under an illegal frame, and customers are obligated to pull out their funds before the deadline or lose their money. The statement reads:
“Many crypto assets are highly speculative and can therefore lose value quickly. The FCA does not have consumer protection powers for the crypto asset activities of firms. Even if a firm is registered with the FCA, we are not responsible for ensuring crypto asset businesses protect client assets (ie customers’ money), among other things.”
Only Three Crypto Companies Are Approved in the UK
Only three companies have been approved by the FCA, which are:
- Gemini, the New York-based trust and exchange owned by the Winklevoss brothers;
- Archax, custodian and exchange platform;
- Ziglu, a cryptocurrency payment app.
Some major companies that offer crypto-services like Bitstamp and Galaxy Digital are still waiting for approval – the number of companies waiting for the FCA’s approval surpassed 150 this year.
Although there are more than 60 companies that operate in the list of temporary registration. According to the FCA, the COVID-19 pandemic made the site visits difficult, and that’s why these companies are working under temporary registration.
The FCA regulates around 60,000 businesses, also supervising 49,000 firms as well as becoming the UK’s supervisor of Anti-Money Laundering and Counter-Terrorist for companies that offer crypto or blockchain products in the country.
This year, the FCA imposed a series of strict regulations for crypto-related products. In January, the institution decided that companies in the United Kingdom will not be able to offer derivative products from cryptocurrencies, like futures, options, or ETNs (exchange-traded notes).