The Financial Conduct Authority (FCA) found that 85% of crypto companies that wanted a license didn’t meet the minimum requirements.
On January 26, the Treasury committee of the House of Commons asked for the study.
It showed that the rules for AML and CTF are not being followed properly.
Even though the UK doesn’t have a set system for regulating digital currencies. The FCA has asked crypto-related businesses to join its AML system if they want to keep doing business in the country.
The FCA’s Findings on Crypto Confessions
The FCA stated at a recent meeting that most crypto company applications were of poor quality, with only 5% passing the initial screening.
According to the FCA, 73% of applications were canceled or rejected, a higher rate of failure than when the regulator changed jobs.
The FCA said that 73% of applications had been canceled or turned down. This was a much higher rate of failure than when the regulator got a new job.
In the worst cases, the FCA found possible links to financial crime or organized crime. And sent the companies in question right away to the right law enforcement agencies.
“Key staff at several organizations lacked the necessary knowledge, skills, and experience to do their jobs and control risks effectively,” the regulator found.
“We are looking into how to regulate cryptocurrencies, and these numbers haven’t changed the idea that some parts of this business are like the Wild West.” The Treasury Committee is made up of people like Harriet Baldwin.
A Look at The Strained Partnership Between Crypto Companies and The FCA
Over the past few years, the Financial Conduct Authority (FCA) and crypto companies have had a rough time getting along.
Since January 2020, when the FCA took over the regulation of crypto assets in the UK. The two sides have had different ideas about how the FCA feels about the industry.
The FCA has imposed strict regulations on cryptocurrency companies, making certain services illegal to sell. The FCA is taking a tough stance against these businesses.
The FCA has fined cryptocurrency companies heavily for failing to comply with its regulations. This is because of the FCA’s tough stance on cryptocurrency firms.
The FCA is eager to work with cryptocurrency companies to ensure an appropriate legal framework is in place. Despite its tough stance on crypto companies, FCA is willing to collaborate with them.
The FCA has come under fire for its slow response to the cryptocurrency industry. The FCA currently lacks a clear plan for regulating crypto companies, which is the primary source of criticism.
Some crypto businesses have moved to jurisdictions with looser regulations due to the FCA’s regulatory uncertainty. Some cryptocurrency companies have decided to operate in more permissive jurisdictions.
Where We’re Going from Here
When it comes to adhering to rules and regulations, businesses related to cryptocurrencies have been among the worst offenders.
In recent years, governments all over the world have imposed increasingly stringent regulations on the bitcoin industry. This is becoming more apparent as crypto companies face more regulations.
Regulators have imposed hefty fines on several well-known cryptocurrency businesses for failing to comply with KYC and AML regulations. Failure to comply resulted in the imposition of heavy fines.
Due to violations of the law, the U.S. Commodities and Futures Trading Commission fined Coinbase $6.5 million in March 2021. The action was taken by the commission due to a violation of regulations.
Coinbase is the name of one of the most well-known online marketplaces where users can buy and sell various cryptocurrencies.
Those in charge of the rules are committed to carrying out their threat of punishment against those who disobey them. Because of this, businesses that are involved with cryptocurrency should develop a preventative compliance strategy.
Should they choose to disobey the regulations, they risk receiving severe punishments and sanctions, as well as having their reputation damaged.