The regulatory approval criteria for a crypto company vary from country to country. In the United Kingdom, crypto regulation is intended to be stricter. As proof, only 41 companies out of 300 have obtained full FCA approval in the past two years. A situation that discourages many crypto companies. Moreover, most of them have decided to abandon the process.
Crypto regulation: a big divergence between the United States and the United Kingdom
After the fall of FTX (and even before), the UK imposed a stricter and more effective crypto regulatory framework. According to a statement by Sarah Pritchard (current head of the FCA), more than 85% of companies awaiting regulatory approval in the UK do not meet the required criteria. Yet these same companies are fully operating in the United States.
This is particularly the case for Wires and B2C2. One is a crypto payment platform and the other a digital asset liquidity provider. Both preferred to abandon the steps of crypto regulation in the United Kingdom.
Crypto companies fail to meet required minimum standards, FCA says
According to the last report published by the FCA, only 41 crypto companies are on the register. This represents nearly 15%. To explain this relatively low percentage, Sarah Pritchard mentions non-compliance with the minimum required standards.
“As part of the registration process, we identified material deficiencies in key controls such as customer due diligence, risk assessments, transaction and ongoing monitoring and governance. “, has she declared.
According to the FCA, some executives lack the experience and knowledge to effectively and securely run their crypto company. Others lack transparency.
Through a strict crypto regulatory framework, the UK aims to become the world leader in digital assets. Unfortunately, the requirements of the British crypto regulator are too high for some companies. Just by seeing the approval statistics, many of them prefer to give up on the process.
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