Many cryptocurrency firms are not meeting Britain’s anti-money laundering and counter-terrorism financing rules, the country’s financial watchdog said on Thursday, showing how some parts of the emerging sector are struggling to meet required standards.
The cryptocurrency world has been plagued through its 12-year life by lax standards on money laundering and other illicit activities.
While standards are widely seen to have improved, global regulators and policymakers have in recent months expressed concerns over the illicit use of crypto.
Since January, cryptocurrency-related firms have had to register with Britain’s Financial Conduct Authority (FCA) – which oversees their compliance with UK laws designed to prevent money laundering and terrorist financing – before doing business.
“The FCA will only register firms where it is confident that processes are in place to identify and prevent this activity,” it said.
Only five firms are registered with the FCA. As of May 12, another 90 have temporary registration, allowing them to continue trading while their applications are assessed. The FCA says this status does not deem them “fit and proper”.
The watchdog will extend the end date of its temporary registration regime from July 9 to the end of March 2022, it said.
The FCA said 51 firms have withdrawn their applications for registration and can no longer trade. Firms that do not do so are subject to FCA enforcement, it added.