86% of UK crypto firms fail to meet anti-money laundering standards, FCA reveals

On Friday, the UK’s Financial Conduct Authority (FCA) revealed that only 41 crypto firms had passed its regulatory approval exam out of 300 applicants. The UK’s 300 companies had submitted applications as part of an ongoing process of regulation and standardization of the nascent financial sector.

FCA’s Director of Markets, Sarah Pritchard, called the findings worrying, adding that she had referred a significant number of defaulters who ‘lacked the appropriate knowledge, skills and experience to perform their assigned roles. and effectively control risk” to law enforcement for possible financial breaches. Following the report, MPs described the wave of crypto in the country as akin to the “wild west”.

Without explaining such a shortfall, the FCA rather hinted at 14% success. He said in his report that these companies were explicit about their business model, responsibilities and authority of internal and external stakeholders, source of liquidity, management models, policy outlines, strategy security and risk, the underlying technology and the flow of funds. Another reason for disqualification was the use of the app by some crypto companies for advertising purposes. At the same time, a review is still ongoing, fooling unsuspecting customers with the appearance of government approval.

Some UK-approved crypto companies are Revolut, eToro, GlobalBlock, Wintermute, and CEX.io, among others.

The UK government in 2020 authorized the FCA to crack down on corrupt financial practices and false advertising after discovering that a growing number of crypto users (2.6 million at the time) had no idea of ​​the malfunctions or risks inherent in the space. Since the crackdown, the use of crypto for payments in major cities has seen a steady decline compared to its European counterparts. Information from Solaris revealed that London trailed Paris, Madrid, Berlin and Sofia as the top five European cities making crypto payments to the tune of £22m, £16.8m, £16.6m £13.8 million and £7.5 million respectively.

In light of the government’s claim to make the UK a globally competitive crypto hub, the FCA’s tough crackdown many believe could send hawkish signals across the crypto space. Led by Ashley Alder – who once described crypto platforms as “deliberately evasive” with a need for “more regulation” – the FCA has worked to use all the powers given by Congress for comprehensive oversight of cryptography.