Digital assets trade association CryptoUK has called on U.K. Chancellor of the Exchequer Rishi Sunak to act over delays for startups registering for the Financial Conduct Authority’s (FCA) Money Laundering Registration (MLR) regime for crypto-asset businesses.
In a letter to Sunak, shared on the group’s website, CryptoUK Chairmen Ian Taylor says the U.K. is “missing out on a major opportunity” as crypto companies trying to sign up under the new regulatory regime experience an “arduous process” and with most of the group’s members having received little or no response from the FCA.
So far, only four out of 200 applications have seen a decision, claimed Taylor, adding, “For some, more than 8 months have elapsed without a single response from the regulator.”
With the FCA having become an anti-money laundering and counter terrorist financing supervisor of businesses last January, it brought in the MLR scheme requiring crypto-asset businesses to become compliant and to register to continue trading.
In December, the FCA acknowledged a backlog of applications from crypto firms that were already trading, extending the deadline for applications to be approved until July 9 2021.
“The clock is again ticking as we approach the new July deadline, whereby existing firms legally have to cease trading,” writes Taylor. “Additionally, hundreds of new businesses have been waiting for months to progress their applications, with staff and overhead costs mounting, as they cannot start trading and earning revenues until their application has been approved.”
The ongoing situation threatens to benefit larger organizations with the funding to “wait the process out,” he wrote, warning that some businesses may either leave the UK or cease trading, which would be a blow for the U./K. economy.
“Whilst our industry appreciates that all new regulatory regimes take time to embed, the industry is experiencing significant challenges with this regime, which run deeper than the issues made public by the FCA,” Taylor said.
CryptoUK is a self-regulatory trade association launched back in 2018 and represents over 50 businesses in the crypto-asset industry.