To ask the Chancellor of the Exchequer, what assessment he has made of the average length of time taken for the Financial Conduct Authority to process applications for anti-money laundering / counter-terrorist financing crypto asset registration.
28 May 2021
The UK is committed to having a robust AML regime for cryptoassets which will help to bolster confidence in the UK as a safe and reputable place to start and grow a cryptoasset business.
On 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets firms. Due to the complexity and standard of applications received, the FCA was not able to process and register all applications by the 10 January 2021 deadline. A significant number of firms have failed to implement appropriately robust AML control frameworks, and to employ fit and proper personnel.
On 16 December 2020 the FCA announced that it was establishing a ‘Temporary Registration Regime’, under which relevant firms are eligible to continue trading pending a decision. This is due to expire on 9 July 2021.
As of 24 May 2021, 5 cryptoasset businesses have received registration from the FCA since 10 January 2020. Of the firms assessed to date over 90% have withdrawn their application following FCA intervention. There are 167 cryptoasset businesses with outstanding applications for AML/CTF registration with the FCA. 77 new cryptoasset businesses have applications pending full assessment.
On 7 January HM Treasury published a consultation on the broader regulatory treatment of cryptoassets, with a focus on cryptoassets known as stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. This consultation has now closed. The government is processing responses and will outline next steps in due course. Any future regulatory regime for cryptoassets set out by the Government in light of this consultation will aim to balance the potential risk to consumers with the ambition to stimulate competition and innovation in the industry.
HM Treasury officials are in regular contact with the FCA, as well as individual firms, industry groups and associations and consumer facing organisations to listen to their concerns on the full range of financial services related issues including cryptoassets.