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The FCA has released a new set of guidelines for companies creating cryptocurrency applications. This provides an insight into that cumbersome registration system.
of guidelines We handle all stages of the application process, including pre-application preparation and post-application procedures.
The FCA has confirmed that companies should include details of their business model and how it demonstrates their risk assessment capabilities. Applications should have a clear understanding of money laundering regulations and how they relate within their own group structure.
Applicants must also demonstrate that they can analyze blockchain data and monitor transactions using policies, controls, and systems that comply with the FCA’s understanding of risk.
The guidance was announced when the UK Watchdog reported that it had approved and registered 41 applications since it came into force in January 2020. Only 15% of the 265 applications made.
Of the remaining submissions, 29 were rejected and 195, or 74%, were either rejected or removed from the process.
In this case, the FCA exemplifies its broad interpretation of the Money Laundering Regulations (MLR), with 85% of applicants failing to meet the minimum regulatory standards. But Watchdog’s response to the latest guidance asks how realistically these criteria are met.
Catherine woolerBusiness Unit Director, Digital Asset Protection Company coin cover“It’s easy to see how this happened.”
To her, the government has yet to put in place the standards necessary to legitimize the industry and introduce some kind of governance to the Wild West.
“Until they do, there will likely be inadequate standards across the industry, including those that push boundaries and directly create turbulence,” she commented. FTX As an example.
That said, we don’t need the government to guide us, continues Wooller. There are hundreds of cryptocurrency companies desperate for regulatory scrutiny. The temporary permissions debacle has let them down.
Given the lack of coherent and standardized regulation, Wooller said the crypto industry can and should set its own standards. It exists.”
For example, businesses can be independently audited so they can avoid controversies such as the collapse of FTX and deploy transaction monitoring and other protective techniques to mitigate theft and loss.
“Former prime minister, philip Hammond Declared that for the UK to excel as a cryptocurrency leader, it must take measured risks, but in order to do so, the community needs measurements to comply with.
If we want to move forward as a global leader in digital assets, we need to stop evaluating companies and work with them to develop a regulatory framework.
“In the meantime, for UK companies keen to ‘do the right thing’, regulators are trying to weed out bad actors that are putting both individual users and institutional investors at a disadvantage,” Wooller said. closing.
for Charlene BiondiDeFi Analyst Moody’s Investors Servicethe FCA recommendations impose compliance standards on crypto asset service providers.
This could set the tone for upcoming talks on cryptocurrency service providers, which are likely to follow a conservative regulatory approach. However, we expect UK regulation to be more flexible than European Union regulation. .”
