The Financial Conduct Authority (FCA) extended the Temporary Registrations Regime (TRR) from July 9, 2021, to March 31, 2022, per its press release. The regime lets fintechs that offer crypto services operate while the FCA assesses whether they meet national anti-money laundering (AML) standards and can be fully registered or must be shut down.
Most fintechs operating in the country are struggling to meet crypto AML requirements, which could erode consumer trust. Just five exchanges have been fully registered since the FCA launched the process in January 2020. Dozens are still only approved under the temporary regime, and a whopping 51 have given up entirely and can no longer operate in the UK. The lack of fully authorized firms suggests most are struggling to comply with AML requirements, giving an advantage to the five registered exchanges, which can assuage consumer concerns with their regulatory bona fides. Crypto exchange Gemini, for example, is registered, while its larger peers by trading volume, Kraken and Bitstamp, remain under the TRR—with the clock ticking. The new deadline will likely encourage more fintechs to integrate third-party regtech solutions to boost their chances of meeting the FCA’s expectations. Neobank Revolut, for example, which still has temporary registration, adopted Elliptic’s crypto compliance software last month.
The extension highlights the FCA’s classic pragmatism in helping market players adapt to requirements based on new fintech services but also heralds more scrutiny.