The FCA sets up a temporary registration regime for crypto firms

The UK Financial Conduct Authority (FCA) has established a Temporary Registration Regime to allow existing cryptoasset firms, who have applied for registration with the FCA, to continue trading.

The UK watchdog advised customers of cryptoasset firms which should have applied to the FCA, but have not done so, to withdraw their cryptoassets or money before 10 January 2021.

Since 10 January 2020, the FCA has been the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for such types of firms, which includes firms that exchange money to and from cryptoassets and those that safeguard their customers’ cryptoassets. From the beginning of this year, ‘existing cryptoasset businesses’ have had to comply with the Money Laundering Regulations and were required to be registered with the FCA by 10 January 2021.

New businesses, who started after this date, are required to obtain full registration with the FCA before conducting business.

FCA regulation

The Temporary Registration Regime is intended for existing cryptoasset businesses which have applied for registration before 16 December 2020, and whose applications are still being assessed. The regime is meant to enable those existing businesses to continue to trade after 9 January 2021 until 9 July 2021, pending the FCA’s determination of their application.

The UK regulator was not able to assess and register all firms that have applied for registration, due to the complexity and standard of the applications received, and the pandemic restricting the FCA’s ability to visit firms as planned.

Firms that failed to submit an application by 15 December 2020 will not qualify for the temporary registration regime. Those firms will need to return cryptoassets to customers and stop trading by 10 January 2021. Firms which do not stop trading by that date risk being subject to the FCA’s criminal and civil enforcement powers.

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