- Registration System Shortcomings
- New Financial Promotions Perimeter
- Opportunities Outside the UK
In the past 12 months, nearly 90% of crypto firms seeking registration in the UK failed to meet the country's financial regulator's standards.
Registration System Shortcomings
According to the UK Financial Conduct Authority’s (FCA) annual report for 2024, crypto firms faced difficulties in gaining approval due to weaknesses in fraud protection and anti-money laundering (AML) protocols. Out of 35 total applications for crypto firm registration in the past year, only 4 were approved, 15 were withdrawn, and 9 were rejected.
New Financial Promotions Perimeter
The regulator also announced a new financial promotions perimeter for crypto advertising in June 2023, to ensure that crypto ads in the UK were clear, fair, and not misleading. The FCA noted increased public awareness of potential crypto scams, with 63% of consumers calling about a scam before investing in a project, a 5% rise from the previous year.
Opportunities Outside the UK
On August 30, international law firm Reed Smith warned that companies might look elsewhere for launching due to long wait times and insufficient political will at the FCA to handle new applications in a timely manner. On average, it takes FCA 459 days to process a crypto firm's registration. Over the last three years, 186 applications were withdrawn.
As crypto companies seek friendlier jurisdictions for their operations, questions arise about London's future role as a global crypto hub.
