Cryptocurrency businesses are likely to undergo a sharp downturn in the United Kingdom (UK) due to strict FCA rules, starting in 2021.
In recent months, the FCA had already dealt the industry a severe blow by banning the sale of derivatives with cryptocurrencies as underlying assets.
But now the risk is even greater because the FCA has required cryptocurrency activities to register with it, otherwise they will have to stop operating inexorably on January 10th, 2021.
It could all be legitimate, were it not for the fact that hundreds of companies that have applied for registration have still not received a response and are seriously afraid that they will have to stop their activities if the FCA does not give them an answer.
One source has revealed to The Cryptonomist that very few of the 400 or so applications submitted are currently being processed. The delays are likely to escalate for two reasons:
- The pandemic, which has reduced the workforce;
- The Christmas period, which is now approaching.
In short, time is running out.
The obligation to register with the FCA puts crypto companies in crisis
The problem has already been raised by some exponents of the crypto world such as James Bowater, founder of CryptoAM.io.
In his tweets he is quite explicit:
“The issue is that there is a huge back log of applications and no indication of extension or waiver. Apparently only 4 (out of 400 applications) have been approved potentially putting at risk a large number of bona fide businesses who are compliant. This urgently needs to be addressed so that applicant companies can be rest assured they don’t have to cease trading”.
Blockchain expert Dr Jane Thomason also confirmed this concern about LinkedIn, adding:
“Given that under current legislation firms will be required to cease trading after 10 January 2021, if not registered with the FCA, It would seem prudent for the FCA to extend the deadline to allow firms to continue to trade while it catches up.
With the acceleration of digital currencies, assets and DeFi during COVID and the desire of the UK to remain a FinTech centre – it’s simply good sense”.
The Cryptonomist attempted to contact the FCA to get their perspective and find out if the January 10th deadline will be pushed but at the moment there has been no response.
Given the Christmas holidays and the ongoing pandemic, it’s a good bet that the delay will continue. To avoid blocking the sector from January 10th, the hope is that the deadline will be extended.