Due to the recent wave of rejected applications, digital currency businesses wishing to operate in the United Kingdom are finding the Financial Conduct Authority’s (FCA) licensing criteria too difficult.
Thirteen potential licensees are said to have withdrawn their applications with authority, bringing the overall number of applicants to 64. According to the numbers, there was a 25% surge in withdrawn applications in June alone, with others rumored to be considering similar measures.
The Financial Conduct Authority (FCA) took over oversight of the digital currency sector in January 2020, with a special focus on anti-money laundering protocols. This spurred the regulator to implement the licensing program, which gave businesses a one-year grace period to comply with the rules.
However, after receiving a flood of applications, the regulator was forced to put up a temporary registration system to allow processing time.
Firms that refuse to participate in the licensing procedure face fines and legal action from the regulator if they continue to trade.
However, some organizations are expected to be permitted to continue operating outside of the agency’s anti-money laundering remit.
The development comes as the United Kingdom tightens its regulations on digital currency enterprises. Recently, the U.K. regulator joined officials in Ontario and Japan in taking action against cryptocurrency exchange Binance. As a result, last month, Binance withdrew its application for U.K. licensure.
Yoni Assia, CEO of trading platform eToro, said the trajectory in the United Kingdom indicates a rising willingness to control the digital currency business and warned that more harsh regulation is on the way in the future.
It comes when governments around the world are tightening regulations on the digital currency sector as they develop their regulatory regimes.