Crypto companies based in UK facing move abroad as regulation too tough for most

The intensive and exacting standards required by the UK financial regulator, the FCA, has led to some companies having to face a move abroad given that they may not receive regulatory approval before the FCA imposed deadline that expires in three days time.

A situation is about to arise in the UK whereby crypto companies that are trying to gain regulatory approval in the country may well be forced to move their business abroad because of the extremely tough regulatory standards imposed by the country’s watchdog.

As the March 31 deadline looms large, crypto companies operating in the UK will need to take the decision to undergo incredibly difficult compliance requirements and face very possible rejection, or move abroad and avoid the process.

According to an article on Bloomberg earlier today, there are still 12 companies on the temporary register who will have to suspend their operations should they not gain regulatory approval in the next three days. 

Of the 12 companies, there are giants in the space, of the likes of digital bank Revolut, and crypto custodian and trading services provider Copper Technologies Ltd. 

Philip Hammond, the ex UK chancellor of the exchequer, a senior advisor to Copper, has termed the situation in the UK as “shocking”, given the lack of clear regulations for crypto, and believes the country could be about to lose a great deal of its talent in finance overseas.

It’s believed that Copper is also pursuing regulatory approval to operate in Switzerland, and this is thought to be a backup measure in case UK approval is not forthcoming.

The Bloomberg article also quoted Blair Halliday, the head of the UK arm of the US based Gemini exchange. Halliday was unhappy about companies that were servicing UK crypto clients from outside the country, and were therefore circumventing the compliance process.

“I’ve had emails from other companies telling me that they’ve just spun up a business in whichever jurisdiction, and that’s the entity that will be servicing U.K. consumers,”

He added:

“Our concern with any legislation is where it unfairly impacts firms going about it the right way in jurisdiction, and by definition, drives customers to an easier location off-site. That’s a potential byproduct of some of these proposals — how on earth can that be a positive?”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.