The FCA is extending the deadline of the Temporary Registrations Regime (TRR) for existing cryptocurrency businesses from 9 July 2021 until 31 March 2022. The extended deadline will allow cryptocurrency firms to continue trading while the FCA continues with its evaluation.
The TRR was established last year to allow existing digital assets firms access to trading if they applied for registration before 16 December 2020. In the meantime there are some applications that are still being processed, and those applicants are allowed to continue trading.
The FCA has said that ” A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations. This has resulted in an unprecedented number of businesses withdrawing their applications”. The FCA is keeping a close eye on the cryptocurrencies business due to the lack of customer protections and regulations.
“Anti-money laundering (AML) and Counter Terrorist Financing legislation are aimed at protecting against enabling the transfer and disguise of funds from criminal activity, or funding of terrorist groups”, said the FCA. While this is not the only element that the FCA will assess, the FCA will only register firms that they believe processes are in place to both identify and prevent illegal activity.
The FCA warns consumers that “Many digital assets investments are highly speculative and extremely volatile. It is unlikely that consumers will have access to The Financial Ombudsman or Financial Services Compensation Scheme, irrespective of whether a firm has temporary or full registration.
