An array of UK crypto firms could be forced to wind down if they fail to attain regulatory approval ahead of a key deadline next week.
Twelve crypto firms registered under the Financial Conduct Authority’s (FCA) temporary regime may have to wind down their activities in the UK if they fail to become fully registered by a deadline of 31 March.
Some of the UK’s most prominent firms offering crypto services, including Revolut and Copper, a digital asset custodian advised by Britain’s former Chancellor of the Exchequer, Philip Hammond, have not yet secured full approval and remain on the temporary register.
Blair Halliday, the head of Gemini UK, a digital asset exchange which was one of the first crypto companies to become FCA registered, said that some firms may have underestimated what it takes to become approved by the regulator.
“We understand what it takes to get the regulator comfortable with our activity and what we have to demonstrate,” Halliday told City A.M.’s tech weekly podcast, noting that Gemini has successfully secured approval from a US regulator.
“If you aren’t familiar with that process, it can be kind of it can be very daunting, it can take time… it’s very much a process of getting regulators comfortable and understanding of how your business operates,” he added. “I think there could have been some firms that thought this was going to be a very routine process.”
The temporary register was set up so that crypto firms could continue to trade in the UK while the financial watchdog determines whether to award approval. Only 33 companies have made it onto the FCA’s permanent register, with 80 per cent of firms either withdrawing their applications or failing to pass the regulator’s robust anti money laundering checks.
Copper declined to comment on whether the business is likely to receive FCA approval ahead of next week’s deadline.