Crypto firms are struggling to meet anti-money laundering (AML) requirements, says the U.K.’s Financial Conduct Authority (FCA).
The regulator, which is in the midst of an effort to get crypto firms registered, said that “an unprecedented number of businesses” have withdrawn their registration applications after finding that they aren’t complying with AML standards.
The FCA launched a temporary registration regime last year for crypto firms that was slated to expire on July 9, allowing firms to continue operating while going through the registration process.
Today, the regulator said it’s extending the temporary regime until March 31, 2022.
“The extended end date will allow cryptoasset firms to continue trading while the FCA continues with its assessments,” it said.
So far, those assessments have found that a “significantly high number of businesses” are not meeting the AML standards. The FCA said it will not register businesses that aren’t meeting rules that “are aimed at protecting against enabling the transfer and disguise of funds from criminal activity, or funding of terrorist groups.”
The FCA also recommended that customers of crypto firms that aren’t actively seeking registration should withdraw their funds from these firms.
In Canada, regulators are also trying to come to grips with regulating crypto trading firms.
Recently, the Ontario Securities Commission (OSC) revealed that about 70 firms are seeking registration after the regulator warned the sector that firms doing business in Canada should register.
The OSC also filed enforcement allegations against one offshore firm that failed to heed that warning.