UK Crypto Companies Face Strict Regulatory Hurdles
The UK’s Financial Conduct Authority (FCA) has revealed that a staggering 87% of cryptocurrency company registration applications were rejected in the fiscal year ending March 31, 2024. Out of the 35 applications received, only four companies managed to secure FCA approval.
Among the approved companies are BNXA, a Binance payment partner, a subsidiary of PayPal UK, and Komainu, a crypto custody company established through a joint venture with Nomura Securities. The remaining applications were either outright rejected or dismissed due to missing key assessment elements.
Since January 2020, the FCA has processed a total of 359 applications from crypto companies, with only 44 receiving approval. This low approval rate has frustrated some unapproved companies, who have complained about lengthy waiting times and a lack of feedback during the registration process. As a result, a number of crypto companies have decided to seek registration in other regions, opting to leave the UK market.
The FCA’s stringent regulatory approach reflects the UK government’s cautious stance on cryptocurrency. While the government aims to foster innovation, it also prioritizes consumer protection and financial stability. The high rejection rate underscores the challenges faced by crypto companies seeking to operate in a regulated environment.
As the cryptocurrency industry continues to evolve, it remains to be seen whether the FCA will relax its regulatory standards or maintain its strict approach. The future of the UK crypto market hinges on the regulator’s ability to strike a balance between innovation and risk mitigation.
