UK watchdog dismisses criticisms over crypto authorisations

Crypto firms are scrutinised by the FCA for their ability to stop their operations being used for money laundering or financing terrorism

September 29, 2022 06:52 pm | Updated 06:52 pm IST - LONDON

A file photo of signage seen for the FCA (Financial Conduct Authority), the UK’s financial regulatory body, at their head offices in London

A file photo of signage seen for the FCA (Financial Conduct Authority), the UK’s financial regulatory body, at their head offices in London | Photo Credit: Reuters

Crypto companies were undeterred by initial failure to obtain licences to operate in Britain and were submitting new applications, the Financial Conduct Authority said on Thursday.

(For insights on emerging themes at the intersection of technology, business and policy, subscribe to our tech newsletter Today’s Cache.)

The FCA has been criticised by lawmakers and the crypto sector for being slow in processing licence applications and for rejecting swathes of applicants despite the UK government's push to make London a global crypto hub.

"It's no surprise that I still see many crypto firms still seeking to get licences here in the UK even though some have been denied those licences at the first pass," FCA executive director for competition and consumers Sheldon Mills told a City & Financial conference.

"They know we have a good system of regulation and if they meet our standards that's important for every jurisdiction that they seek to apply for around the world," Mills said.

"That is a benefit to the UK economy and UK financial service industry, and is good for competition, inward investment and growth."

Crypto firms are scrutinised by the FCA for their ability to stop their operations being used for money laundering or financing terrorism.

In March, the FCA said that 90% of crypto firms seeking approval for their anti-money laundering controls have either withdrawn their applications or been refused because they could not meet the standards.

Mills said 95 people have been hired to the watchdog's authorisations team and the pending caseload has fallen by 40%.

"Over time, we expect faster, better decisions will support us in bringing down the costs of the regulatory system," Mills said.

Jean-Marie Mognetti, chief executive of crypto asset manager CoinShares, said the company chose to list in European Union member state Sweden because Britain and the FCA were "not very keen" to see any crypto companies in London.

Mognetti said the European Union's new set of 'MiCA' rules for fully licensing crypto firms will put the EU at an advantage over Britain.

"If you talk about attractiveness from a regulated activity , the fact that London is not part of MiCA and will not have passporting in Europe... is going to be a massive handicap," Mognetti said.

Under a draft law now before parliament, Britain will licence stablecoins, but leave the rest of the cryptoasset industry for a later date.

Top News Today

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.