Crypto firms face being booted from UK as FCA register deadline nears

A novelty Bitcoin token photographed on a £10 note.

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LONDON — A slew of cryptocurrency companies could be forced to wind down their business in the U.K. if they fail to register with the finance watchdog ahead of a key deadline next week.

From Mar. 31, firms operating crypto services in Britain must be registered with the Financial Conduct Authority, which is tasked with overseeing how digital asset firms combat money laundering.

Last year, the regulator extended the deadline allowing firms on a temporary register to continue trading while they sought full authorization — it’ll close once the deadline passes. The FCA said many crypto companies had withdrawn their applications as they were not meeting the required anti-money laundering standards.

Now, with just days to go until the new deadline elapses, the fate of firms on the temporary register — including $33 billion fintech firm Revolut and Copper, a crypto start-up that counts former U.K. Finance Minister Philip Hammond as an advisor — hangs in the balance.

‘A total disaster’

Why it matters

Brexit dividend?

President Joe Biden has signed an executive order calling for coordination from the government on oversight of digital currencies, while EU lawmakers recently voted down a proposal that would have effectively banned bitcoin mining in the bloc.

“While major jurisdictions are spotting the opportunity and the risk, the U.K. is emphasising the risk,” Magaldi told CNBC. “By moving too fast and too narrow, rules and timeframes create hurdles to crypto firms that could potentially displace them from the U.K. market.”

Industry representatives fear this could put the U.K. at a disadvantage at a time when it is vying to be a global leader in financial innovation post-Brexit. The country is home to a thriving fintech industry, attracting nearly $12 billion in investment last year.

But fast-growing fintechs like Revolut and Copper may soon be forced to wind down their crypto activities in Britain and move offshore if they don’t make it onto the full register. Both companies declined to comment when contacted by CNBC.

Firms like PayPal and Coinbase, which sell crypto services in the U.K. through overseas subsidiaries, will be unaffected.

Source: https://www.cnbc.com/2022/03/24/crypto-firms-face-being-booted-from-uk-as-fca-register-deadline-nears.html