The FCA has announced that it is extending the end date of the Temporary Registrations Regime ('TRR') for existing cryptoasset businesses from 9 July 2021 to 31 March 2022.
The TRR was set up to enable certain existing cryptoasset businesses that applied for registration before 16 December 2020 to continue trading whilst their applications are assessed by the FCA. The FCA is currently advising customers of "cryptoasset firms that should have applied to the FCA, but have not done so, to withdraw their cryptoassets or money".
Businesses carrying on cryptoasset activity in the UK are required to be compliant with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) and, as such, must register with the FCA.
According to the FCA, a "significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations" - which has resulted in a substantial number of businesses withdrawing their applications.
The extension of the deadline to 31 March 2022 will enable cryptoasset firms to continue carrying on business whilst the FCA continues with its assessment process.
"Anti-money laundering and counter terrorist financing legislation are aimed at protecting against enabling the transfer and disguise of funds from criminal activity, or funding of terrorist groups. While this is not the only element that the FCA will assess in relation to an applicant, the FCA will only register firms where it is confident that processes are in place to identify and prevent this activity."