The Financial Market Regulatory Authority announced, in an official statement, an extension of their temporary registrations regime for new cryptocurrency firms operating within Britain’s borders who are not approved yet but have been given permission by regulators so long as they continue working towards approval before then end date at 2021-03-31.
The registration program was put into place last year after uncertainties had crypto investors shook.
The said announcement by the Financial Conduct Authority will have a huge impact on how we look at this issue. The problem is that the approval process from regulators is delayed to make sure everything goes smoothly for us all to be safe with these new cryptocurrencies investments.
Recently, the Financial Conduct Authority (FCA) has been forced to postpone its deadline for the registration of cryptocurrency companies.
The FCA initially set a January 10th, 2021 as their cutoff date and instructed all existing and new crypto firms to register before that day or risk being denied access to UK markets.
However, in light of recent developments such as Brexit-related uncertainty, they have decided it best not to extend any deadlines at this time but are confident about launching future initiatives if necessary.
The TRR scheme, introduced by the market watchdog last December allows crypto companies to continue operating until July 9th of 2021. For an extension this long to be granted, there has been a need for change in terms that were not previously agreed upon with many coming up against new regulations set forth.
The FCA has granted crypto-asset firms an extension date to continue their business while the organization carries out its rigorous assessment.
The Long Walk to Approval
The regulator is changing the landscape for crypto businesses. In addition, many companies are abandoning their applications and closing down operations because they can’t meet regulations that require them to identify customers of all transactions made or received in fiat currency from an anonymous account holder.
The FCA is set to enforce regulations to prevent money laundering and other illegal activity. The watchdog will not allow firms to register where they cannot prevent this activity.
Crypto companies in the UK are being delayed by red tape. The regulator has been slow to approve any new crypto businesses, while a Member of Parliament is pushing for continued progress on their registration process.
Cryptocurrency markets have always had an issue keeping up with regulations but now after years under development even governments around the world want some say over bitcoin trading volume within their borders (although again only Gemini and Archax were lucky enough to get approval thus far).
Well, the cost of regulation is high and there are a lot of crypto businesses competing for regulatory space with each other, not just against competitors in different sectors such as finance or transportation.
So the SEC has been careful so far about which business they allow on their platform because once you’re allowed then it becomes more expensive if your company starts doing poorly financially than any other competitor who was denied entry into this exclusive club would be charged.
However, fearing the rise of cryptocurrency, Britain’s financial regulator has banned the retail sale and advertising. The FCA is worried about a new wave of mass interest in crypto that can bring with it an increased risk for investors who are largely not informed or educated on this risky investment product.
Furthermore, because cryptocurrencies lack stability as well as being available to any person around the world without requiring approval from regulators globally- there may be no recourse should something happen like fraud or theft which would have been prevented if only regulated institutions were involved instead; therefore they must discourage these investments before more people get hurt by them