The UK’s financial regulator the Financial Conduct Authority (FCA) on Monday posted a statement reminding all UK-based cryptocurrency businesses and any other traditional business conducting cryptocurrency-related activities to register with it before the end of June 2020.
This, according to the statement, should provide the regulator enough time to process the registrations and provide registration certifications before the hard deadline for compliance on January 10th, 2021.
“Any businesses that started carrying on business in the UK immediately before 10 January 2020 and are not registered by the FCA by the 10 January 2021 deadline will have to cease carrying on business,” the FCA warned.
Crypto-related businesses that were launched after January 10th are considered not yet approved for operations by the FCA according to the statement.
The FCA became the official regulator of the cryptocurrency businesses in the UK on January 10th this year, the same date that the UK implemented the EU approved AML5 directives for curbing money laundering as well as terrorism financing. The AML5 directives require all cryptocurrency businesses to demonstrate exhaustive precautions and measures on the implementations of the FATF Travel Rule that mainly focuses on the AML/CFT measures.
Similarly, the FCA requires all completed registrations filings to include exhaustive measures to ensure that the registrants adhere to the AML5 directives as approved by the EU.
“Firms authorized or registered under the Financial Services and Markets Act 2000, Electronic Money Regulations 2011 or Payment Services Regulations 2017 but undertaking crypto-asset activity subject to the MLRs will also be required to apply for registration.”
This means that any businesses not explicitly registered as cryptocurrency businesses but also conduct crypto-related activities will need to adhere to the Travel Rule as well. Failure to which, they will be deregistered by the regulator.
The FCA first announced the need for the new registrations from all UK-based businesses conducting cryptocurrency-related activities back on January 10th immediately the regulator was put in charge of cryptocurrency activities in the country. The UK is one of the most pro blockchain jurisdictions allowing for the free use and transfer of value using cryptocurrencies.
However, this has led to increased cases of illegal value transfer due to insufficient regulation of the crypto scene necessitating the establishment of a regulator to ensure world-wide rules are adhered to within the UK. And according to the FCA statement on Monday, the regulator “will proactively supervise firms’ compliance with the new regulations, and will take swift action where firms fall short of desired standards.”
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