Applications to register as a crypto exchange or custodial wallet provider have fallen by 51% over the past three years, according to data obtained through a Freedom of Information (FoI) request from global law firm Reed Smith.
THE Financial Supervisory Authority (FCA)
Financial Supervisory Authority (FCA)
The Financial Conduct Authority (FCA) is the UK’s largest financial regulator for all financial markets. The UK regulator is responsible for the conduct of firms authorised under the Financial Services and Markets Act 2000. In addition, the FCA is also responsible for regulating behaviour in retail and wholesale financial markets, supervising the business infrastructure that supports these markets and prudentially regulating firms not regulated by the PRA. Its role
The Financial Conduct Authority (FCA) is the UK’s largest financial regulator for all financial markets. The UK regulator is responsible for the conduct of firms authorised under the Financial Services and Markets Act 2000. In addition, the FCA is also responsible for regulating behaviour in retail and wholesale financial markets, supervising the business infrastructure that supports these markets and prudentially regulating firms not regulated by the PRA. Its role
Read this term) reported that only 29 applications were filed between May 1, 2023 and April 30, 2024. This is down from 42 applications the year before and 59 applications the year before that. The first quarter of 2024 saw just seven applications, the second lowest quarterly figure in the past three years.
Brett Hillis, Partner at Reed Smith, Source: LinkedIn
The average approval time for applications over the past three years stands at 459 days. Industry experts fear that this slow pace could undermine the UK’s broader goal of becoming a global cryptocurrency hub. The lengthy approval process could discourage potential applicants and undermine confidence in the regulatory framework.
Over the past three years, 186 firms have withdrawn their applications. However, the number of withdrawals has decreased significantly, falling by 78% in the past year compared to 2021-22. This decrease suggests that applicants may be better understanding the FCA’s requirements and expectations, resulting in fewer withdrawals.
Withdrawal and Request Data
The data provided by the FCA highlights several key trends. In the last year, 29 applications were submitted, compared to 42 in 2022-23 and 59 in 2021-22. Over the same period, 20 firms withdrew their applications for registration, compared to 73 in 2022-23 and 93 in 2021-22.
“The good news is that the drop in applications suggests that businesses are now much better informed about what the regulator expects,” said Brett Hillis, partner at Reed Smith.
“This can only be a positive development and would also explain the reduction in approval times, as the FCA has to spend less time reviewing poor quality applications. It is clear, however, that there is scope for further acceleration.”
The average time to approve applications over the past year was 311 days, an improvement on 497 days the year before. Since 2021, the FCA has spent the equivalent of 25 years assessing cryptoasset applications.
Since new financial promotion rules came into force in October 2023, the FCA has identified 1,010 breaches in the first seven months to April 2024. The introduction of these rules has led to increased monitoring and enforcement activity across the sector.
Applications to register as a crypto exchange or custodial wallet provider have fallen by 51% over the past three years, according to data obtained through a Freedom of Information (FoI) request from global law firm Reed Smith.
THE Financial Supervisory Authority (FCA)
Financial Supervisory Authority (FCA)
The Financial Conduct Authority (FCA) is the UK’s largest financial regulator for all financial markets. The UK regulator is responsible for the conduct of firms authorised under the Financial Services and Markets Act 2000. In addition, the FCA is also responsible for regulating behaviour in retail and wholesale financial markets, supervising the business infrastructure that supports these markets and prudentially regulating firms not regulated by the PRA. Its role
The Financial Conduct Authority (FCA) is the UK’s largest financial regulator for all financial markets. The UK regulator is responsible for the conduct of firms authorised under the Financial Services and Markets Act 2000. In addition, the FCA is also responsible for regulating behaviour in retail and wholesale financial markets, supervising the business infrastructure that supports these markets and prudentially regulating firms not regulated by the PRA. Its role
Read this term) reported that only 29 applications were filed between May 1, 2023 and April 30, 2024. This is down from 42 applications the year before and 59 applications the year before that. The first quarter of 2024 saw just seven applications, the second lowest quarterly figure in the past three years.
Brett Hillis, Partner at Reed Smith, Source: LinkedIn
The average approval time for applications over the past three years stands at 459 days. Industry experts fear that this slow pace could undermine the UK’s broader goal of becoming a global cryptocurrency hub. The lengthy approval process could discourage potential applicants and undermine confidence in the regulatory framework.
Over the past three years, 186 firms have withdrawn their applications. However, the number of withdrawals has decreased significantly, falling by 78% in the past year compared to 2021-22. This decrease suggests that applicants may be better understanding the FCA’s requirements and expectations, resulting in fewer withdrawals.
Withdrawal and Request Data
The data provided by the FCA highlights several key trends. In the last year, 29 applications were submitted, compared to 42 in 2022-23 and 59 in 2021-22. Over the same period, 20 firms withdrew their applications for registration, compared to 73 in 2022-23 and 93 in 2021-22.
“The good news is that the drop in applications suggests that businesses are now much better informed about what the regulator expects,” said Brett Hillis, partner at Reed Smith.
“This can only be a positive development and would also explain the reduction in approval times, as the FCA has to spend less time reviewing poor quality applications. It is clear, however, that there is scope for further acceleration.”
The average time to approve applications over the past year was 311 days, an improvement on 497 days the year before. Since 2021, the FCA has spent the equivalent of 25 years assessing cryptoasset applications.
Since new financial promotion rules came into force in October 2023, the FCA has identified 1,010 breaches in the first seven months to April 2024. The introduction of these rules has led to increased monitoring and enforcement activity across the sector.
