The UK’s Financial Conduct Authority (FCA) is being criticised for prolonged delays in processing crypto asset registration applications.
Some crypto firms have been waiting for over 753 days for a decision, with many applications ultimately being refused, according to recent data.
Hence, concerns have been raised within the industry about the efficiency and transparency of the FCA’s registration process.
Criticising FCA’s approach to crypto firms, Irfan Baluch, partner at law firm Cripps said, “The FCA has made the UK a hostile environment for crypto businesses.”
The FCA, the UK’s primary financial regulatory body, oversees the registration of crypto asset firms. Since its inception in 2020, the FCA has processed over 300 applications, but only 45 firms have received approval.
Explaining FCA’s Cautious Approach
Just this month, the FCA and the Metropolitan Police detained two people on suspicion of running an illicit cryptocurrency enterprise worth $1.3 billion.
Bloomberg reported that the FCA has been cracking down on unregulated crypto firms.
FCA busts suspects in a $1.2B illegal crypto asset business
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The stringent criteria and thorough scrutiny applied by the regulator has been explained by Sarah Pritchard, the FCA’s Executive Director of Supervision, Policy, and Competition. Pritchard insisted that the regulator prioritize trust and market integrity over speed.
“A simple focus on numbers could undermine trust and reputation,” Pritchard stated, defending the FCA’s cautious approach.
Crypto Industry Frustrated With 14% Acceptance Rate
Since the beginning of 2024, the crypto industry has expressed frustration with the FCA’s slow processing times. Many firms reported waiting for over a year for feedback on applications, leading to operational uncertainties and financial strain.
Furthermore, the application itself has come under fire for being complex and demanding, with pre-application meetings without a guarantee of a successful application.
“The FCA is trying to apply 20th century solutions to 21st century technologies,” said Baluch. “As understanding of and capabilities of crypto advance, legislation and regulation should attempt to advance at the same pace.”
EXPLORE: 15 Best Crypto Presales to Invest in 2024
As the UK aims to position itself as a global crypto hub, balancing regulatory rigor with industry growth will be crucial.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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