The UK Financial Conduct Authority (FCA) faces criticism for lengthy processing times for cryptocurrency applications, potentially driving businesses away from the UK market. A freedom of information request (FOI) revealed that the average processing time for a crypto application is a staggering 459 days, equivalent to over 25 years of backlog.
This has led to a significant decline in the number of crypto firms registering with the FCA. In the past three years, registrations have fallen by 51%, and 186 firms have withdrawn their applications. Experts warn that these delays could push crypto businesses to seek more welcoming regulatory environments in other countries.
Reed Smith partner Brett Hillis expressed concerns that the lengthy process might be discouraging firms from operating in the UK, potentially harming London’s competitiveness as a financial hub. He emphasized that businesses are unlikely to wait indefinitely for approval, especially when other jurisdictions offer faster processes and access to comparable or even larger markets.
However, Hillis also noted a positive aspect of the declining number of applications. He suggested that the decrease might indicate that firms are becoming more familiar with the FCA’s expectations, leading to higher-quality applications and potentially contributing to the recent reduction in processing times.
