The number of unregistered cryptocurrency-related businesses continues to outweigh that of the UK Financial Conduct Authority. Crypto.com became the latest company from the cryptocurrency ecosystem to register with the FCA, joining a list of 37 verified companies that have the green light to offer services in the country.
Only seven companies went through the registration process to receive anti-money laundering approval in 2022, including eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited and Wintermute Trading LTD. Crypto.com is the seventh, registered under FORIS DAX UK Limited.
The FCA has also compiled a list of UK-based companies that continue to engage in “crypto asset activities” without being registered with the FCA for anti-money laundering (AML) purposes. The list is extensive and mainly includes companies offering a variety of cryptocurrency trading and forex services.
In January 2020, new cryptocurrency-focused regulations were enacted to allow the FCA to oversee companies operating in this space and enforce anti-money laundering and anti-terrorist financing (MLR) regulations.
Businesses had just over a year to submit applications for approval under a Temporary Registration Scheme (TRR), while failure to comply and continue operations could be considered a criminal offense.
Related: Enforcement and Adoption: What Does the UK’s Recent Regulatory Targets Mean for Crypto?
Cointelegraph has reached out to the FCA to show its regulatory reach across the industry, the process of the temporary registration system, and the number of unregistered companies currently operating. The organization emphasized that it does not oversee the entire cryptocurrency landscape and has no consumer protection powers.
The body also noted that it was restricted from registering UK-based cryptocurrency exchanges for anti-money laundering purposes. The FCA also explained that the TRR was set up to allow crypto firms already trying to register to retain temporary trading permits during the process.
Firms were still able to apply for registration with the FCA during the TRR and will be able to do so after the April 2022 cut-off. The regulator also stressed that firms should not act until they have registered. The FCA completed the assessments of all firms during the TRR except those where it was deemed necessary to continue to have a temporary registration.
The latest list of FCA temporary registration companies includes only one company listed as of 17 August. Revolut, which offers a variety of digital banking services, is the only company on this list that has seen business slowly decline through 2021 and 2022. The FCA would not be tempted to comment on each firm’s ongoing temporary registration status.
A spokesperson for the FCA told Cointelegraph that the standards it sets for registration aim to provide investors with a safe environment while supporting the innovation promised by the industry:
“Successful registration depends on a firm meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we have seen too many financial crime red flags missed by crypto-asset companies seeking registration became.”
The FCA will continue to process registration applications for cryptocurrency exchanges and service providers, emphasizing the importance of minimum standards to ensure the provision of adequate systems to identify and prevent the flow of money related to criminal activity:
“As a result, we have seen new regulated companies, many resorting to the use of crypto or the underlying technology. Strong, recognized regulation helps innovators by building consumer and investor confidence.”
While the FCA admitted it lacked the teeth to crack down on unregistered operators in the country, it continues to keep a close eye on these organisations. The speaker stressed the fact that the UK Parliament controls the boundaries of regulation and ultimately determines what the agency regulates.