The UK’s aspiration to become a global hub for cryptoassets has hit a major roadblock, with the Financial Conduct Authority (FCA) not granting any new crypto business registrations in the last six months. This stark contrast with the promises made in 2022 by then-Chancellor Rishi Sunak to establish the UK as a “global cryptoasset technology hub” has left many in the industry questioning the future of crypto in the country.
Data from the FCA registry, updated on August 1st, reveals that only four out of 34 applications received in the past year were approved, with the last successful registration being institutional market-maker Portofino Technologies in February.
Industry insiders attribute this slow progress to the FCA’s strict and complex regulatory framework, particularly around marketing to consumers. Binance and PayPal have both cited these regulations as reasons for suspending certain crypto services in the UK. The FCA’s recent report on crypto firms’ compliance with these rules, which came into effect in October, highlights the significant challenges faced by many firms in adapting to the new regulatory landscape.
The FCA maintains that its stringent standards are crucial to protecting consumers and the integrity of the financial system, especially given that crypto investments are not eligible for government compensation.
