LONDON—The U.K.’s financial watchdog continues to maintain strict supervision of the emerging crypto industry in the country, according to a new report.
Since Jan. 10, 2020, 291 crypto asset businesses in the country have applied for registration under the 5th Anti-Money Laundering Directive (5MLD). However, the Financial Conduct Authority (FCA) has approved only 38 firms or 13% of received applications, Finance Magnates reported, citing information from a Freedom of Information request.
“Despite approving only 38 applications, the regulator said it does not decline firms. It, however, further pointed out that it has so far refused five applications and rejected 22,” Finance Magnates said.
5MLD is a set of rules introduced in January 2020 to bolster the European country’s anti-money and counter-terrorist financing regime. The regulation is the revised version of the 4th Anti-Money Laundering Directive (4MLD) created in 2015, Finance Magnates explained.
Conditions Not Met
Additionally, the FCA clarified that it had refused certain applications because the applicants did not meet the conditions for registration under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs). MLRs are a set of rules in the U.K. that outline the steps that business organizations must take to prevent money laundering and terrorist financing.
“Firms are required to provide the minimum information set out under regulation 57 of the MLRs; any firm that has not provided the required information will have their application rejected,” the FCA noted.
More Than 150 Withdrawals
The FCA also noted that 155 crypto businesses withdrew their registration applications during the period. The applications were cancelled for a number of reasons, including not meeting the benchmark for registration as a digital asset exchange and crypto custody wallet provider, Finance Magnates said.
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