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UK regulator reports high failure rate for crypto firm registrations

GrafaGrafa2024/09/09 02:35
By:Mahathir Bayena

The UK Financial Conduct Authority (FCA) has reported that over 87% of crypto firms seeking registration have either been rejected, withdrawn, or refused, highlighting significant challenges in meeting the regulator's standards.

This revelation is part of the FCA's Annual Report and Accounts for 2023-24, which outlines its efforts to combat fraud and enhance consumer protection within the crypto sector.

The FCA emphasised that its stringent registration process aims to ensure that only firms that meet the highest standards are authorised to operate.

As part of its guidance, the regulator helps firms understand its expectations by issuing directives on both good and poor practices.

Despite the high rejection rate, 44 crypto firms have successfully registered for money laundering compliance.

To further safeguard consumers, the FCA introduced new marketing rules for crypto assets earlier in 2024.

These rules include a 24-hour cooling-off period for investors and classify crypto assets as “Restricted Mass Market Investments.”

The regulator emphasised that these measures are designed to ensure that crypto promotions are clear, fair, and not misleading.

Since the new rules took effect, the FCA has issued 450 consumer alerts against firms promoting crypto assets illegally.

The FCA's report also highlights its broader initiatives to combat financial crimes.

Since April 2023, the regulator has conducted several supervisory visits and enforced new controls targeting high-risk firms.

These steps are aligned with the FCA’s ongoing commitment to reducing money laundering and improving fraud detection across various financial sectors, including cryptocurrencies.

Furthermore, the FCA is actively involved in shaping global standards on crypto regulation and other financial areas like sustainability and non-bank finance.

The agency continues to collaborate with international bodies to enhance oversight and create a more secure and regulated environment for the growing crypto industry.

The FCA remains committed to ensuring that firms comply with its rules to protect consumers and maintain market integrity.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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