The FCA criticized the extension of the British crypto registration period

The Financial Conduct Authority has extended a temporary licensing program for cryptocurrency companies and thus risked the anger of the British legislator, which the regulatory authority has asked to comply with the period of April 1st

The FCA announced the Financial Times on Wednesday that its temporary registration system for crypto companies for everyone except a “small number” of companies whose applications have not yet been fully processed would be concluded.

A Person familiar with the situation said that a dozen companies should continue trade in fixed -term licenses, which means further extension after the program was originally supposed to end in December 2021.

The FCA had previously said that crypto companies without permanent licenses would be forced to hire their British activities by April 1. The regime initiated in early 2021 is the first attempt by the FCA to regulate the rapidly growing crypto industry. It only covers the processes and procedures of companies to prevent money laundering and terrorist financing.

The dozen companies that have received a temporary postponement include those who are still responding to FCA information requests, those who do not give them permanent permits against the decision of the FCA, and others who need time to cease their business.

public records show that the payment giant Revolut is one of the companies that are still active under the temporary regime. The company said it had not commented on ongoing admission applications.

A report by the special committee of the Ministry of Finance in January criticized the supervisory authority for "too slow" in the processing of applications and said the deadline should not be extended further.

MEL Stride MP, Chairman of the Finance Ministry of Finance, said: "It is disappointing to hear that the FCA has not fully met its own, extended period, to comply with the committee of which it emphatically granted it. I look forward to receiving a complete explanation for the delay."

The person trusted with the approach of the FCA emphasized that strict standards had to be enforced and said that the temporary regulation would only be extended for a "very small number of companies". Of the 106 companies that have joined the temporary regulation, only 33 were registered.

"We have seen too many warning signals for financial crime that have been overlooked by the cryptoasset companies that apply for registration," said the FCA. "Even worse, we have seen examples where companies do not have the necessary controls to whose red flags at all."

Nevertheless, the slow and strict approach of the FCA did dozens of crypto companies to leave the United Kingdom and stupred the tensions between the industry and the regulatory authority.

"We decided some time ago to say 'shit on her'," said the managing director of a crypto company who had decided to move her business to Europe after being asked to withdraw her FCA application.

"I have been the biggest fan of the FCA for years. They were the gold standard of regulation. But no longer," said the manager who previously managed FCA-regulated companies.

crypto companies that move to other countries, mostly, is free to continue to operate their British customers from offshore.

The Crypto Market Maker B2C2 said that after withdrawing his application he would move his activities to his US company. Lithuania, which is known in the industry for its receptive attitude towards crypto, has developed into a popular choice for companies that are spurned by the FCA. Other European destinations such as Switzerland have also attracted numerous companies.

"The lack of clarity on the part of the FCA has given companies major challenges in terms of business security," said Lisa Cameron MP, chair of the British Parliament group for crypto and digital assets.

"We are now hearing from companies that actively leave the United Kingdom as a direct consequence of the FCA approach, which will cost the United Kingdom in relation to jobs, talents and income," she added.

Additional reporting by Siddharth Venkataramakrishnan