The UK Financial Conduct Authority (FCA) has taken the equivalent of 25 years to process incoming crypto applications, according to a freedom of information request (FOI).
It has also been reported that the number of crypto firms registering with the FCA has fallen by 51% in the past three years and that 186 have withdrawn their applications to the financial regulator. This has raised concerns about whether the lengthy timescales are forcing crypto asset firms to look elsewhere for a place to do business.
According to the Financial Times, the FOI submitted by the Law firm Reed Smith revealed that assessing a crypto application took the FCA an average of 459 days.
The number of submitted applications dropped to 29 between May 2023 and April 2024, down from 42 and 59 in the two years prior. Only seven applications were made in the first quarter of 2024.
Read more: FCA tackles ‘operational backlog’ with 100 crypto staff
Reed Smith partner Brett Hillis said, “If it’s the case that applications are falling because crypto firms have essentially given up waiting and started looking abroad, this should send a clear warning about London’s competitiveness.”
He added, “Firms aren’t going to wait forever for approval, particularly if another jurisdiction seems to offer a comparatively quick process, with access to a comparably sized or even larger market.”
He also noted, however, “The good news is that the falling number of applications suggests that firms are now much better acquainted with what the regulator expects.
Read more: FCA too slow on crypto enforcement, says UK’s spending watchdog
“This can only be a positive development and would also explain the fall in approval times as the FCA has to spend less time wading through poor-quality applications. Clearly, though, there is scope to speed up further.”
In June, the FCA’s joint executive director of enforcement and market oversight announced that crypto firms are registering with the FCA at an increased rate. The FCA also announced that it is upping its team of crypto staff to 100.
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Source: https://protos.com/it-took-uk-regulator-25-years-to-assess-all-crypto-applications/