UK’s FCA Defends Harsh Crypto Standoff to Combat Illicit Activities
In defense of financial integrity, the UK’s Financial Conduct Authority justifies this harsh position in its stand regarding the registration of crypto companies.
UK’s FCA Justifies Tough Crypto Registration Rules, Citing Risks and Illicit Activities
UK’s Financial Conduct Authority, facing increased criticism for the strict registration requirements for crypto firms, came forward on Monday, 21 October, to defend its stance by stating that such measures were required to maintain the integrity of the financial system.
Addressing the issue of a high rejection rate for crypto firm applications, Val Smith, head of payments and digital assets at the FCA, said: “setting and maintaining standards people can trust is a key part of any thriving, competitive sector”. She told the audience that the FCA was not arbitrarily rejecting applications but taking crucial measures with regard to safety standards.
Smith cited severe risks in the crypto industry, including terrorism, organized crime, and human trafficking, for keeping high standards of registration. He emphatically rebuffed calls to reduce such standards, warning that it would result in a “race to the bottom” that might compromise security in the markets.
Crypto Firms Struggle to Meet FCA Standards Amid Crackdown on Illicit Activities
With pre-application meetings and ongoing support, too, the standards that the FCA sets are clearly too high for many crypto firms to attain. Indeed, the FCA’s annual report showed that just 13% of crypto firm applications were approved last year, meaning the remaining 87% were either rejected or withdrawn-a further reflection of how onerous the regulatory environment has proved.
In a separate unrelated incident, the FCA recently charged one Olumide Osunkoya from London with operating illicit crypto automated teller machines without registration with the FCA. This was actually a first that the prosecution had entered in the UK and was part of the wider range of efforts to be made by the FCA in putting an end to illegal crypto activities, such as money laundering.
