UK FCA Rejects 90% of Crypto Firms for AML Compliance Failures

The UK regulator body, the “Financial Conduct Authority,” only approved registering 4 organizations out of 35 crypto firms, stating issues with “money laundering compliance.”

In the last 12 months, 90% of crypto businesses in the UK failed to comply with the regulations of the country’s financial regulator, leading to “disapproval of registration.”

Weak AML Controls Lead to Rejection

Crypto organizations faced disapproval due to lacking robust and effective money laundering and fraud protection procedures, as the “UK Financial Conduct Authority’s (FCA) annual report for 2024” stated.

According to the report findings, “Over 87% of crypto registrations were withdrawn, rejected or refused for weak money laundering controls.”

Last year, the regulator granted registration permission to only 4 crypto businesses to operate; 9 were rejected, and 15 applications were withdrawn out of the 35 submitted applications.

Note: Everything You Need To Know About AML Crypto

Regulator Rejects Incomplete Submissions

The regulator declared in an additional feedback, “We have rejected submissions that didn’t include key components necessary for us to carry out an assessment, or the poor quality of key components meant the submission was invalid.”

The FCA established a new “financial promotion perimeter” in June 2023 for cryptocurrency advertising to ensure transparency, honesty, and liability in crypto ads so individuals can understand and avoid deception.

Raising the Awareness among UK Public

The regulatory body has noted that awareness of crypto scams among the UK general public has increased over time, with a 5% rise in consumers inquiring about crypto scams before investing, increasing from 63% in 2023.

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Suggestions to operate outside the UK

Global law organization “Reed Smith” recommended on 30th August that crypto businesses consider starting their operations outside the United Kingdom.

They highlighted that the UK regulator FCA takes too long to approve new crypto registration applications and doesn’t have enough determination to speed up  the procedure

Registration Process of FCA

The FCA has taken almost 459 days to execute the registration of a crypto business in the last 3 years. The Regulator body’s work on these applications is equal to 25 years if just one person was doing it.

In the meantime, “186 applications” had been withdrawn over the previous three years.