Home - Blockchain - Regulatory Crackdown on Crypto Firms in the UK

James Carter

January 27, 2023

Regulatory Crackdown on Crypto Firms in the UK

According to a statement made by an officer at the Financial Conduct Authority, several of these investigations into financial crime, or “direct links to organized crime,” are still underway.

In a letter that came out on Thursday, an official with the United Kingdom’s financial regulator said that the organization had sent several cryptocurrency companies to law enforcement after the companies tried to register with the regulator.

In a letter to the Treasury Select Committee dated January 19, Sarah Pritchard, executive director of markets supervision, policy and competition at the Financial Conduct Authority, said the following: “Overall, in the small number of cases where we have identified likely financial crime or direct links to organized crime we have referred these to law enforcement agencies.” “A number of those investigations being conducted by law enforcement are still continuing.”

The governing body announced on Wednesday that it had received 300 applications from crypto businesses requesting a license to provide their services to clients in the country in accordance with its anti-money laundering regulations.

According to the Financial Conduct Authority (FCA), only 41 businesses were successful in registering with the regulatory body, while 195 firms either had their application denied or chose to withdraw it. Twenty-nine of the applications out of a total of 300 were not approved by the FCA because they did not meet the standards for approval.

Nikhil Rathi, the CEO of the FCA, stated in a meeting that took place in November last year that the regulator has been criticized for taking a severe position on cryptocurrency because it was required.

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According to what Pritchard stated in the letter, “The FCA adopted a tough position during authorization such that the danger of criminality was greatly minimized, which resulted in the high rejection percentage.”

The United Kingdom has been making more significant efforts to regulate cryptocurrencies recently. The police force has placed crypto tactical advisors at various locations across the country. The Economic Crime and Corporate Transparency Bill, which is currently being debated in Parliament, will provide law enforcement agencies with more power to seize and freeze cryptocurrency that is used in criminal activities. Meanwhile, the Financial Services and Markets Bill could expand the FCA’s own abilities to police the industry.

The Financial Conduct Authority (FCA) did not disclose how many cryptocurrency companies it had reported to other government organizations.