UK FCA Grants Crypto Firms Temporary Registration as It Deals With Applications Backlog

Cryptocurrency businesses that have filed to register with the U.K. Financial Conduct Authority (FCA) may continue operating under a temporary licensing regime for six months as the regulator deals with a backlog of applications.

• In a notice Wednesday, the FCA said those companies that began operating after Jan. 10, 2020, will be granted temporary registration over the period from Jan. 9, 2021, until July 9, 2021.
• The watchdog warned those cryptocurrency firms that had not applied for registration by Dec. 16, 2020, would not be eligible for the temporary regime.
• Due to the coronavirus restrictions on visits and the “complexity and standard of the applications” received, the FCA said it has not been able to assess and register all the firms that applied.
• Since July of this year, the FCA has been warning cryptocurrency businesses it will need at least six months to fully process applications before the hard deadline in January 2021.
• There had been fears in the industry crypto firms might be left in no man's land as the deadline looked set to pass with many applications still waiting to be processed.
• In the notice, the FCA also warned that those firms that have not applied by Dec. 16 must return crypto assets to customers and stop trading by Jan. 10, 2021.
• Companies failing to do so will be breaking the law and "are at risk of being subject to the FCA’s criminal and civil enforcement powers."
• The FCA requires any company carrying out activity related to crypto assets in the U.K. to register and comply with anti-money laundering and counter-terrorist financing requirements.

See also: UK Crypto Derivatives Ban Seen Having Limited Effect on Small Market