Question to the HM Treasury:

To ask Her Majesty's Government what plans they have to accelerate registration with the Financial Conduct Authority of companies involved in the crypto sector.

To comply with the Money Laundering Regulations (MLRs), cryptoasset firms must demonstrate systems, controls, policies and procedures adequate to deal with the particular risks of the cryptoasset market; any officers, managers and beneficial owners must be fit and proper; and they are required to register with the FCA for the purposes of money laundering supervision.

In some cases, the FCA has needed to request additional information from firms when applications contained insufficient supporting information and evidence. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The government does not believe it would be appropriate for the FCA to relax the standard against which firms are assessed. To do so would risk undermining the UK’s high anti-money laundering and counter-terrorist financing standards.

To manage delays in the processing of applications for registration, the FCA has established the Temporary Registration Regime. It allows existing cryptoasset firms, which had applied to be registered with the FCA by 16 December 2020, to continue trading whilst their applications are assessed. This has prevented undue disruption to established cryptoasset businesses and their customers, whilst ensuring all firms are subject to a rigorous assessment process.