Recent discussions have swirled regarding the stance of the U.K.’s Financial Conduct Authority (FCA) on granting regulatory approval to crypto firms. Nikhil Rathi, CEO of FCA, provided crucial insights at a Treasury Select Committee hearing, explaining that their commitment to stringent regulatory scrutiny is not influenced by the size of crypto companies seeking their approval.
Overseeing the registration and supervision of crypto businesses in the U.K., the FCA handles its responsibilities with strict adherence to anti-money laundering regulations. It has received a robust pool of over 300 applications from prospective firms in the last two years, with only 42 emerging successful in receiving the regulator’s stamp of approval.
The FCA has gained a reputation for maintaining firm standards, even choosing to turn down requests from some of the largest crypto firms around the globe. The world’s most significant crypto exchange by trading volume, Binance, famously ended up on the wrong end of the FCA’s meticulous inspection, despite its enormous market footprint. Far from indicating bias against innovation, Rathi explained that these decisions were born from a persistent commitment to maintaining clean markets by meeting anti-money laundering standards, a measure that these applicants could not assure.
Rathi also emphasized the need to prioritize robust decisions instead of granting bias towards companies with a larger market share, warning of the dangers of using market metrics as a determinant for approval, as it could result in overlooking potential compliance issues.
Indeed, the landscape for crypto firms in the U.K. may soon experience significant changes. New authorization regimes are under consideration, which could necessitate all local and overseas firms to apply for an FCA license to function in the nation.
June saw the passing of a new markets bill, further empowering the FCA to regulate the crypto industry effectively and enhance consumer protection. This legislation signals the likely advent of more stringent rules for the crypto sphere in the future. The primary challenge remains finding a balance between fostering innovation and ensuring stringent regulation that provides much-needed safety to the market participants. Ultimately, it is an unenviable task that will exert substantial influence on the future of cryptocurrencies in the U.K. market.
Source: Coindesk
