The Financial Conduct Authority (FCA) has announced an extension to the deadline by which crypto-asset businesses in the UK must be registered. Businesses now have a further 9 months to become registered by the FCA in order for them to continue their crypto-asset activities. Such activities include the likes of buying, selling and managing accepted crypto assets belonging to another person.
Since 10th January 2020, UK crypto-asset businesses have been required to register with the FCA in order to comply with Money Laundering Regulations. The businesses initially had up until 10th January 2021 to register. Those businesses that applied for registration prior to 15th December 2020 were permitted to continue their activities under a temporary registration regime until 9th July 2021. The FCA has announced that it will allow businesses to continue to operate under this temporary registration regime until 31st March 2022 whilst they continue to deal with applications.
It has been highlighted, however, that a large number of businesses have withdrawn their registration applications due to their inability to meet the Money Laundering Regulations requirements. The FCA has stated that anti money-laundering requirements are not the sole factor taken into consideration when determining their decisions. However, it remains the case that the FCA is unable to approve registrations unless adequate evidence is provided to demonstrate that firms are able to identify and prevent money-laundering whilst carrying out their crypto-asset activities.
Although the deadline has been extended to permit firms to continue with their activities whilst the FCA continue to review applications, crypto-asset businesses which are not registered by this extended deadline will be required to cease trading and return crypto-assets to their users.