According to a government minister, digital currency firms in the United Kingdom fail to meet their anti-money laundering duties.
According to John Glen, the Treasury’s economic secretary, only five digital currency businesses have registered with the Financial Conduct Authority (FCA) since January 2020. The FCA’s new regulatory responsibility for enforcing AML rules in the industry began in January 2020.
Glen stated in recent official statements that establishing digital currency enterprises under the legislation had been challenging, resulting in the bulk of applicants seeking AML certification relinquishing their permits.
Over 90% of the enterprises that have been reviewed so far have withdrawn their application due to the FCA’s involvement. There are 167 crypto asset companies with excellent applications.
Glen also mentioned that the FCA still has to review the applications of 77 new businesses.
According to the minister, the regulator has been unable to approve the bulk of applications due to failures in the implementation of stringent new anti-money laundering (AML) requirements placed on digital currency enterprises and a failure by enterprises to employ adequate employees.
To address the backlog, the FCA has launched a new ‘Temporary Registration Regime’ for businesses until July 9, which allows them to continue business until that date without having obtained the appropriate AML clearances.
According to the Minister, the UK Treasury had been in contact with the FCA and other industry players as part of its consultation on the regulatory framework for the digital currency sector.
In light of this survey, any future regulatory framework for crypto assets established by the government would strive to strike a balance between the potential danger to consumers and the desire to foster competition and innovation in the market.
In recent months, the Financial Conduct Authority has been granted a more significant responsibility in regulating the digital currency business. It was stated in March that companies would be required to file annual financial crime reports. The sale of digital currency derivatives to ordinary investors was previously prohibited by the SEC.