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The UK’s Financial Conduct Authority (FCA) reported that an overwhelming 87% of crypto companies failed to secure approval for licensing under the country’s money laundering regulations during the last fiscal year. According to the FCA’s annual report, only four out of the 35 applicants received a license between April 2022 and March 2023.
Among the few companies that successfully registered were notable names such as BNXA, Binance’s payments partner, PayPal’s UK unit, and Komainu, a crypto custody venture involving Nomura. The FCA rejected or declined the remaining applicants due to missing critical elements required for compliance.
“Over 87% of crypto registrations were rejected, withdrawn or refused,” the FCA stated. Despite the high rejection rate, the regulator emphasized its commitment to guiding firms through the process. “We help firms applying for authorization by communicating our expectations and issuing guidance on good and poor practice.”
The FCA has been in charge of regulating cryptocurrency companies’ registration under anti-money laundering regulations since 2020. It also tightened its grip on crypto promotion in the UK. Though 359 applications have been submitted to the agency thus far, only 44 businesses have been approved for registration. Numerous applicants have expressed their frustration with the situation, with some claiming that the procedure has become more challenging due to extended wait times and inadequate input from the regulator.
The newly elected Labour government has complicated matters further by postponing the implementation of new cryptocurrency legislation. For businesses waiting for official legislation granting them permission to operate in the UK, this pause has created uncertainty. To get around the regulatory crunch in the interim, a few cryptocurrency companies are thinking about moving their operations overseas.