The financial regulator in the United Kingdom, the Financial Conduct Authority (FCA) had put in a great deal of effort for regulating cryptocurrencies in the country. Registration was the focus of this year, which required companies in the crypto space to register their names and activities. However, it appears that the FCA is facing a lot of difficulties in processing the applications put forward by the sheer number of companies. An official announcement was made by the FCA, which granted temporary approval to all crypto companies that have applied for it. This period would be extended till July 9th, 2021, after they meet an initial deadline for registration on January 10th, 2021.
The slow-paced approval process was blamed by the FCA on problems with site visits during the fresh lockdowns and the ‘standard and complexity of the applications’. The agency stated that these bottlenecks had hindered their ability of handling applications. The oversight of the crypto industry in Britain was taken by the FCA on January 20th, 2020. An announcement had been made, which confirmed that counter-terrorist financing (CTF) and anti-money laundering (AML) would be regulated by the agency in the crypto space. The initial points of call included demanding all UK-based crypto companies to register with the regulator.
Furthermore, a licensing requirement had been rolled out by the FCA for companies, which had a deadline for January 10th, 2021. All companies affected by it would need to follow its standard practices and regulations from that date. Full registration licenses would be required by new companies for continuing their operations. However, these temporary licenses would cover those companies that were operating before the FCA had taken over its new role on January 10th, 2020. While some firms will be alienated by the new licenses, it shows that the FCA has made significant progress when it comes to oversight.
Having a strong grip on all players within a nascent industry is the best way to take effective control, and it seems that the FCA is on the right track. The efforts made by the agency haven’t gone unnoticed. The chief executive at Ripple Labs, Brad Garlinghouse said in October that his company was considering moving to the UK because of the efforts put in by the FCA. He said that a clear taxonomy could be seen in the UK and the FCA had taken the role in characterizing how to think about these new assets as well as their use cases.
The end result is that XRP is not classified as a security and should be used as a currency. He added that operating in the UK with that kind of clarity would certainly be beneficial for the company. Garlinghouse compared the FCA with other agencies, such as the US’s Securities and Exchange Commission (SEC), which appears to be regulating the space via enforcement. He threatened to exit the United States because of a lack of clarity about XRP’s status. However, no other announcements have been made by the company about a possible move.