The UK’s FCA rejects criticism over the authorization of cryptocurrencies

Crypto firms are scrutinized by the FCA for their ability to stop their operations being used for money laundering or terrorist financing.

Cryptocurrency companies have not been deterred by their failure to obtain licenses to operate in Britain and are making new applications, the Financial Conduct Authority said on Thursday.

The FCA has been criticized by lawmakers and the crypto sector for being slow to process license applications and rejecting large numbers of applicants despite the UK government’s push to make London a global crypto hub.

“It’s no surprise that I’m still seeing many crypto firms still trying to get licenses here in the UK, even though some have been refused those licenses on the first pass,” FCA chief executive for competition and consumers Sheldon Mills told the City & Financial conference .

“They know we have a good system of regulation, and if they meet our standards, that’s important to every jurisdiction they’re trying to apply to around the world,” Mills said.

“This is a boon for the UK economy and the UK financial services industry and is good for competition, inward investment and growth.”

Crypto firms are scrutinized by the FCA for their ability to stop their operations being used for money laundering or terrorist financing.

In March, the FCA reported that 90% of crypto firms applying for compliance with their anti-money laundering controls either withdrew their applications or were rejected because they could not meet the standards.

Mills said 95 people have been hired on the watchdog authorization team and the backlog has dropped 40%.

“Over time, we expect faster and better decisions to support us in reducing the costs of the regulatory system,” Mills said.

Jean-Marie Mognetti, chief executive of crypto asset manager CoinShares, said the company decided to list in the European Union member state of Sweden because Britain and the FCA were “not very interested” in seeing any crypto companies in London.

Mognetti said the European Union’s new “MiCA” set of rules for full licensing of crypto firms would give the EU an advantage over Britain.

“If you are talking about the attractiveness of regulated activity, the fact that London is not part of MiCA and will not have a passport in Europe … will be a massive handicap,” Mognetti said.

Under a bill now in parliament, Britain will license stablecoins but leave the rest of the crypto-asset industry for later.