Time is running out for cryptocurrency businesses looking to get approval to operate in the U.K.
As the Financial Times reported Friday (March 18), the country’s Financial Conduct Authority (FCA) has given its blessing to just 27 of the 100-plus companies that applied for crypto registration, with less than two weeks before a crucial deadline for these businesses.
Beginning April 1, firms that want to operate in Britain will need to be registered by the FCA. Close to two dozen others are still waiting for the watchdog’s decision.
As the report notes, many digital asset companies have turned to other countries that are viewed as being more hospitable to crypto operations, although the FCA’s stringent regulations have caused many businesses to see it as the gold standard.
The FCA has taken a tough stance on crypto businesses. In October, it barred the sale of crypto derivatives to small retail investors, saying they are too risky and too complex for novice investors. And last week, it announced a crackdown on crypto ATMs.
The authority said 106 firms had joined a temporary register by early last year, which let them conduct business while their applications were processed. Of that group, 58 have withdrawn their applications or had them denied, 27 won approval and 21 were still being considered as of March 15. Among these are the payments app Revolut and custodian Copper.
The FCA said it would complete its review in time for the deadline, and is working to ensure these companies’ products are not used for terror financing or money laundering. Regulators tell the FT many applications have been lackluster.
Read more: UK’s FCA Looks for Lead of Crypto Team
“They are smart folks, [with a] start-up mindset, move fast and break things,” Richard Fox, interim director of international at the FCA, said of the applicants last month. “And that is not how regulators work.”
For their part, crypto companies say the FCA is hampering innovation and competition.
“Clearly it’s good that we’re getting regulation in this space,” Dan Moczulski, U.K. managing director for eToro, whose crypto business has been approved, told the FT. “Clearly it’s bad that it’s taking so long to roll out. It has to decrease the attractiveness of the UK.”