UK says 90 percent of crypto companies seeking license have no anti-money laundering measures
As the UK seeks to position itself as a leading hub for Web3 innovation, financial authorities are stepping up their efforts to ensure the stability and security of the crypto sector. A recent report from the UK’s Financial Conduct Authority (FCA) revealed that 90 percent of recent crypto company registration applications were rejected. Major reasons for these rejections include concerns over inadequate security measures, particularly around fraud prevention and anti-money laundering protocols.
Upon release of this reportThe FCA said the feedback is intended to help crypto firms better prepare for the UK registration process.
According to the FCA, the UK received 359 applications for registration of crypto businesses between January 2020 and September 1, 2020. Of these, only 47 firms (14 percent) registered successfully, while 40 firms (12 percent) had their applications rejected. A significant majority – 240 firms (70 percent) – withdrew their applications before a decision was made, with the remaining 13 firms (4 percent) being rejected outright by the FCA.
“We have rejected applications that did not contain the essential elements necessary to carry out an assessment, or were invalid because of the poor quality of the essential elements,” the FCA said.
This disclosure is intended to benefit current and prospective crypto asset applicants, as well as consultants and industry associations involved in the sector. The UK Financial Authority has instructed all crypto businesses seeking to register in the UK to be well aware of the laws to prevent money laundering.
“If a crypto asset business, whether based in the UK or overseas, plans to advertise to UK consumers from 8 October 2023, we expect them to communicate their promotions lawfully in accordance with our financial promotions rules for crypto assets,” the FCA said.
In July 2023, the crypto sector became a regulated financial sector in the UK. According to StatisticsThe number of crypto owners in the UK is expected to reach 23.9 million by 2025.
As the number of young adults entering the crypto market in the UK has increased, the National Health Service (NHS) recently issued a message to the public identifying crypto trading addiction as a public health issue.
The UK is not the only country stepping up efforts to prevent cryptocurrencies – known for their fast and often untraceable transactions – from being abused by terrorists and criminals.
For example, India has made it mandatory for all crypto companies operating in India or seeking to expand there to register with the Financial Intelligence Unit, adhere to the Prevention of Money Laundering Act (PMLA), and agree to obtain KYC data of all their users.
