FCA Grants Further Extension to British Crypto Businesses for Ensuring Compliance of Updated AML Regulations

The majority of crypto exchanges in the UK have failed to ensure compliance with the AML Policy standards for which the Financial Conduct Authority (FCA) had asked the exchanges to obtain registrations and a deadline was given. The deadline has accordingly been extended by FCA because the authority noticed the withdrawal of the majority of applications by the crypto exchanges.

Temporary Registrations Regime (TRR) was recently introduced by the Financial Conduct Authority (FCA) of the UK. As per the TRR, crypto businesses were to apply for registration with the authority through the submission of applications. The registrations were required for the purposes of ensuring compliance with the Anti-Money Laundering (AML) policy by the crypto exchanges. For the said purpose, a deadline of 10th January 2022 was also set up by FCA.

However, in the meantime, FCA noticed that a large number of applications for TRR were being withdrawn by filers. Earlier, the authority had made a statement that a large number of crypto businesses in the UK were not complying with AML policy. This sent a completely opposite message to the rest of the UK crypto exchanges. Exchanges then started to withdraw their applications pending approval on the pretext when no one else is registering then why should they register. But according to FCA, the major problem for most the crypto exchanges that have failed to file applications was the issue of the deadline.

Now FCA has informed that it has extended the application submission deadline. It was told that the new date of filing of TRR applications has been extended till 31st March 2022.

It was specifically stated by FCA that the deadline has been further extended keeping in view the principle of fair opportunity. Non-registered firms will continue to render their services and in the meanwhile, FCA will ensure efficient assessment of their applications.

It was in the year 2020 when FCA had updated the AML Regulations and the standards. Thereafter, FCA made it compulsory upon crypto businesses operating in the UK to ensure the incorporation of updated AML Regulations. For this purpose, FCA set up a deadline date initially as 10th January 2021 but afterward, on its own, changed the deadline to 9th July 2021. The deadline was again extended for a further date of 16th December 2020, and, in the meantime, crypto exchanges were allowed to operate.

While extending the deadline date, FCA pointed out that the authority wants to ensure compliance of AML. In addition, it is also the aim of the authority to ensure the adoption of the legislation concerning counter-terrorist financing by the exchanges. A warning was also sent to all businesses concerned that there will be zero tolerance against non-compliant business. It is therefore the duty of the exchanges to prevent activities of money laundering and terrorism funding by fully implementing the policies.

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