Crypto UK has sent a letter to the Chancellor of the Exchequer, Rishi Sunak, advocating on behalf of Fintech innovation – specifically crypto-assets.
Crypto UK is a self-regulatory trade association for the UK cryptoasset industry, created to promote higher standards of conduct. Members include high-profile names in the digital asset sector like Binance, eToro and others.
Crypto UK believes that the UK can become a leader in the cryptoasset asset sector if policies and regulations enable the industry to develop.
Recently, the organization stated that “a large number of the organization’s members are seeking to be admitted to the Financial Conduct Authority’s (FCA) Anti Money Laundering register. However, many have reported an arduous process and lack of feedback from the regulator.”
The AML register kicked off in January 2020 but, to date, only 4 out of 200 applications have been approved, according to Crypto UK. The association states:
“A large number of our members are seeking to be admitted to the register. The regime was meant to ensure crypto asset firms implement and adhere to financial industry standard anti-money laundering practices. However, the application process far exceeded this scope and endeavors to assess applicants against a higher standard more closely aligned to an full electronic money institution authorisation. Many of our members have reported undergoing what can only be described as an arduous process. Additionally, most of our members have received limited, and in many cases, no response at all from the FCA since submitting their applications. For some, more than 8 months have elapsed without a single response from the regulator.”
Perhaps even more worryingly, Crypto UK states they have received reports that the Financial Conduct Authority (FCA) “disbanded its crypto asset team last year.” Previous members are said to have been dispersed to other departments and the Cryptoasset Authorisation Team is “generally understaffed.”
Access to banking is another topic of concern. Crypto UK states that a survey they completed indicated that “73% of crypto asset firms have been forced to open a bank account in another country due to complications with obtaining banking relationships in the UK.”
Finally, it is the belief of the association that [we] “must show the world that the UK is open for business and innovation.”
The UK has a long-established prominence in the Fintech sector and Brexit has fueled renewed efforts to maintain this status. But perhaps crypto-assets may not hold the same allure as more traditional financial services? Hard to tell.
It will be interesting to see if the Chancellor chooses to respond to the requests from the association, either directly, or indirectly.