According to Cointelegraph, the UK Financial Conduct Authority (FCA) 2024 annual report shows that nearly 90% of crypto company registration applications failed to pass the review in the past 12 months, mainly due to insufficient anti-fraud and anti-money laundering protocols.
The report pointed out that more than 87% of crypto registrations were withdrawn, rejected or denied due to weak anti-money laundering controls. Last year, only 4 of the 35 applications were approved, 15 were withdrawn, and 9 were rejected.
The FCA has set out new “financial promotion scopes” in June 2023 to ensure crypto advertising in the UK is clear, fair and not misleading.
The FCA also mentioned that the UK public’s awareness of potential crypto scams has increased, with 63% of consumers seeking information about scams before investing, a 5% increase from the previous year.
International law firm Reed Smith warned that crypto companies may consider doing business outside the UK due to the long time it takes the FCA to process new applications and a lack of political will. Over the past three years, the FCA has taken an average of 459 days to process an application, which took a total of 25 years of manpower.
Brett Hillis, a partner at Reed Smith, said that if the drop in applications is because crypto firms give up waiting and look abroad, it should send a clear warning about London’s competitiveness.