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Dozens of firms that deal in cryptos like Bitcoin (BTC) and Ether (ETH) might have been facing imminent closure in the UK after failing to meet the country’s anti-money laundering rules. Thankfully, the FCA extended the deadline for the Temporary Registrations Regime (TRR) giving crypto firms more time to comply with requirements.
According to the Guardian, up to 50 crypto firms might have been forced to close by the Financial Conduct Authority (FCA) before it decided to extend the deadline. The regulator might be forced to take such action as these crypto firms have failed to meet UK’s anti-money laundering regulations.
The regulator noted that a number of crypto firms have decided to withdraw their applications for temporary permits. Under this scheme, companies can continue to offer crypto services to their clients until such time that the FCA will green-light their businesses or formally reject their operations.
“A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations,” the FCA said. “This has resulted in an unprecedented number of businesses withdrawing their applications.”
Companies that retracted their permit applications are required to stop trading immediately “until they can meet the watchdog’s standards and are admitted to the formal list of registered businesses,” according to the Guardian. Those that refuse to close down could face legal action and fines by the regulator.
The regulator explained that the anti-money laundering regulations are meant to prevent terrorist and criminal groups from disguising the source of their funds. “While this is not the only element that the FCA will assess in relation to an applicant, the FCA will only register firms where it is confident that processes are in place to identify and prevent this activity,” the regulator pointed out.
However, the FCA announced on Sunday that it is giving crypto firms more time to comply with requirements. This would mean that firms that already submitted the applications last December will still be able to continue their operations.
“The FCA is extending the end date of the Temporary Registrations Regime (TRR) for existing cryptoasset businesses from 9 July 2021 to 31 March 2022,” the regulator said. “The TRR was established last year to allow existing cryptoasset firms that applied for registration before 16 December 2020, and whose applications are still being assessed, to continue trading.”
