The UK’s top financial watchdog, the Financial Conduct Authority (FCA), has revealed that many cryptocurrency firms are still seeking licenses to operate in the UK despite failing to meet regulatory requirements for the first time. “They know we have a good regulatory system, and if they meet our standards, that’s important to every jurisdiction they seek to apply around the world,” the regulator said.
Sheldon Mills, executive director of competition and consumer at the Financial Conduct Authority (FCA), spoke about cryptocurrency regulation at the Cities & Finance Conference on Thursday.
U.K. lawmakers and the crypto industry have criticized the country’s top financial regulator for being slow to process license applications and rejecting many applicants, even though the government has previously said it wants to make the U.K. a global hub for crypto assets.
Mills explained that crypto companies are not intimidated by the strict licensing requirements, noting that many of them are still reapplying for a license to operate in the UK even after being denied the first time. “Unsurprisingly, I still see many crypto companies still seeking licenses in the UK, although some have been denied these licenses in the first round,” she said, elaborating:
They know we have a good regulatory system and if they meet our standards it is important to every jurisdiction they seek to apply in around the world.
“It’s good for the UK economy and the UK financial services sector, good for competition, inward investment and growth,” Mills added, noting that 95 people have been hired to join the FCA’s licensing team and the number of pending applications has dropped by 40%.
The FCA has previously said that 90% of cryptocurrency companies seeking a license to operate in the UK either withdraw their applications or are rejected because they do not meet the criteria.
Over time, we expect faster and better decision-making will support us in reducing the cost of the regulatory system.
Under the new Prime Minister Liz Truss, cryptocurrency regulation in the UK may be changing. Several key officials who had worked on the country’s cryptocurrency policy resigned from the government before she took office, including former Chancellor of the Exchequer Rishi Sunak and Finance Minister John Glenn.
The UK government introduced the Economic Crime and Corporate Transparency Bill in the House of Commons last week. The government detailed that it “aims to strengthen the UK’s fight against economic crime”. In May, the U.K. government outlined its plans to support cryptocurrency adoption and confirmed its commitment to regulating stablecoins.
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