UK Proving to be Tougher on Crypto Companies Than the US

Joshua Ramos

Recent data has shown that the UK is proving to be far tougher on cryptocurrency companies than the US. Specifically, 85% of firms attempting to register with a UK regulator are denied. Subsequently, there have seen some US-based cryptocurrency companies withdraw their applications altogether.

Following the standards of acceptance for financial registration in England being raised, US cryptocurrency companies Wirex and B2C2 have both bailed on registration. This follows a trend of the England regulators being much tougher on the policing and registration of digital asset companies. With MiCA around the corner, this will only get tougher.

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UK Regulation Standards Affecting Crypto Companies

The debate of regulation for the digital asset industry is a constant one. It may always be a hurdle the industry faces. Yet, following 2022’s excessive criminal and fraud schemes being uncovered, it has become a hotly debated topic to start this year.

Those events have apparently had a big effect on the level of leniency that some companies are setting for regulation. Recent data reported by Blockworks has shown that the UK is proving to be much tougher on cryptocurrency companies than the US.

The UK’s Financial Conduct Authority (FCA), has reported that the vast majority of cryptocurrency firms applying for regulation in the country are denied. Subsequently leading go to only 41 companies being listed on the FCA’s cryptocurrency asset firm registry. That number equates to only 15% of applicants.

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Moreover, FCA executive, Sarah Pritchard, stated that the vast majority of cryptocurrency firms couldn’t withstand new standards. Specifically, stating they were “unable to demonstrate they meet the required, minimum standards.”

Additionally, Pritchard stated, “As part of the registration process we identified significant failures in relation to key controls such as customer due diligence, risk assessment, transaction, and ongoing monitoring [and] governance.”

Source: Gallup News

Conversely, in the US, states maintain some control over what companies can offer regarding cryptocurrency services. Blockworks notes that, for example, New York’s regulation BitLicense law has prohibited companies like Binance.US and Kraken from operating in the state.

However, the UK has a much more uniform approach. This tougher approach has already caught the ire of some companies. Still, with the MiCA laws and the European Union (EU) bringing forth stricter guidelines, it appears as though tough standing on regulation will be a growing trend. Following the FTX collapse, it may well be a good thing.