The U.K. markets regulator says significant numbers of crypto firms are withdrawing applications to register with the watchdog after struggling to meet its anti-money laundering standards.
“A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations resulting in an unprecedented number of businesses withdrawing their applications,” the Financial Conduct Authority said in a statement Thursday.
The FCA said it is extending the end date of its Temporary Registrations Regime for existing crypto-asset businesses from July 9, 2021 to March 31, 2022. The process is designed to allow companies to continue to trade while their applications are being assessed.
Those firms not part of that regime or registered with the FCA are at risk of being subject to the regulator’s criminal and civil enforcement powers if they continue trading.
The watchdog also used the statement to issue another warning to investors about the speculative nature of crypto assets.
Customers should be prepared to lose all their money, the FCA said in the statement. It is unlikely that that customers will have recourse to compensation schemes, irrespective of whether a firm has temporary or full registration with the FCA, it said.