While the UK has been a global leader in the development of fintech regulation, a more cautious approach is being taken with crypto, leading some top companies to head for the exit.
“It’s hard to change the culture of a large organization overnight, but that’s probably what we need to do at FCA,” said Ian Taylor, head of Crypto UK.
The Financial Conduct Authority failed to provide clear regulations, leaving 100 companies that failed to meet its standards for anti-money laundering procedures in registration hell. The investigation into how blockchain technology could be used to update traditional financial market infrastructures only began last year.
“When we decide that a company is not meeting the listing standard, we are clear with them where they are wrong. Money laundering regulations do not include a provision for companies to withdraw their claims. However, in some cases, we may allow a business to opt out, cease operations, make necessary changes based on our feedback, and reapply. Companies that do not opt out receive a formal decision which they can appeal, including in court,” mentioned the guard dog.
As a result, venture capital investment in UK companies has resisted trends in the first quarter of 2022, falling 70% year-over-year to $176.3 million, while the rest of the world jumped more than 200% in the same period.
CAF became the policing company gatekeeper for anti-money laundering and anti-terrorism measures in 2020, requiring crypto companies operating in the UK to apply for registration.
Blockchain.com, one of the largest crypto companies in the country, recently suffered a financing round that valued it at $14 billion. However, the company has had a bumpy ride trying to receive FCA approval. Blockchain.com was originally among a list of 12 companies that received tentative approval due to its anti-money laundering processes found to be FCA compliant. However, it was dropped when the listing subsequently lost seven companies.
The majority of the crypto sector has left the UK
Cryptocurrency firm Copper was also on the provisional list of 12 companies and remained when the list was reduced to five companies.
However, sources told the Guardian that the company is now considering moving to Switzerland, where it already has an office in Zug. Should Copper UK’s ambitions falter, it could jeopardize the $500m cash injection it is seeking from venture capital to put its valuation at $3bn. Philip Hammond, former UK chancellor, now a senior adviser at Copper, said many crypto companies in the UK are considering migrating to Monaco, Switzerland and Germany due to the uncertain state of the regulatory landscape in the UK. UK.
About two weeks ago, a spokesperson for British crypto firm Blockchain.info Told the Evening Standard, “As of last week, over 90% of the sector has left the UK for more progressive countries in Europe.”
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