Moneybrain, one of only four FCA authorised firms in the UK trading cryptocurrency, has welcomed the news that the FCA will still enforce its January 2021 deadline on hundreds of firms and sole traders that make the industry a ‘wild west’.
In January 2020 it was announced that all existing cryptoasset businesses would be supervised by the FCA for anti-money laundering and counter terrorist financing by 10 January 2021, as part of new global regulations on the industry. Firms had to apply for registration to ensure compliance.
As the deadline looms, the FCA has announced the 10 January 2021 deadline still holds and firms that have not applied for registration must still cease trading by the date.
The FCA has however granted temporary regulation to a number of cryptoasset firms that have applied, as the pandemic has meant not all applications have been reviewed in time for the deadline. These firms can continue to operate until 9 July 2021, by which date they will receive a final decision on theior status.
Lee Birkett, founder and CEO of FCA registered financial organisation Moneybrain and global asset backed cryptocurrency BiPS, says: “Despite the delay announced by the FCA, the enforcement still of the January deadline for non-applicants and those who couldn’t apply as they didn’t meet regulatory criteria, means hundreds of UK cryptocurrency traders will not be trading soon. We believe this will be a turning point for the operation, and reputation, of digital currency in the UK and all over the world.
“We estimate up to 300 UK crypto industry participants and sole traders – around three quarters of the existing wallet providers and exchanges – will have to cease activity. Only 95 will now operate in the UK and 92 of these are only doing so with temporary regulation, so this number could reduce further in the second half of 2021.
“Anyone with cryptocurrency and assets needs to immediately check if their exchange or firm is on the list of temporary registered companies or with Ziglu, Gemini or Archax. If they aren’t, their assets could disappear from 10 January 2021.
“Crypto and digital currency is going to continue to grow and lead the fintech world and this move by the FCA is all part of our road to regulation. Having regulation will instil confidence in consumers as we continue to grow more familiar with crypto.
“The chancellor has made it clear that, post Brexit, there will be a new chapter for the UK’s innovative financial sector. That new chapter needs legislation and a governing body. Historically, crypto has been viewed by many as operating in a digital underworld or on the ‘dark net’ and having unfavourable traders and firms openly able to operate – who will now be removed – was damaging to the industry and its ability to grow.”
In November, the Government also outlined a renewed focus on digital currency. “As a nation we are leading globally on plans for new technologies like stablecoins and Central Bank Digital Currencies. “
Moneybrain is an FCA authorised financial services firm that trades digital currency BiPS and other leading digital currencies globally. Currently, only three firms are on the FCA’s approved list of registered cryptoasset firms. These are Ziglu, Gemini and Archax. Moneybrain is awaiting final approval to also be listed as cryptoasset-authorised in addition to its existing regulatory status.
