The FCA has only given the green light to five of the hundreds of crypto businesses which have applied for AML registration. So it's no surprise that the FCA has announced an extension to the Temporary Registrations Regime (TRR) for cryptoasset businesses from 9 July 2021 to 31 March 2022.
The FCA became the AML / CTF supervisor for cryptoasset firms in January 2020. It set up the TRR later that year to allow existing cryptoasset firms who had applied for registration to continue trading whilst they were being assessed. With a "significantly high number" of those businesses not meeting Money Laundering Regulations standards, "an unprecedented number" of applications have been withdrawn.
The FCA hopes that extending the TRR will allow cryptoasset firms to continue to carry on business while the FCA continues with its "robust" assessment. However, with some companies saying that the FCA has not provided clear enough guidance, is the extension sufficient to enable more cryptoasset firms to be registered? Or is more guidance and reflection needed in this space?
Only five companies have successfully registered with the regulator since the process began in January 2020. Several dozen are still operating under temporary status, while 51 companies have withdrawn their applications, in many cases after the regulator signalled it was unlikely to give them the nod.