UK regulator says crypto firms still applying for licences

The Financial Conduct Authority said on Thursday that companies were unaffected by initial failure to obtain licences to operate in Britain and were submitting new applications.

The FCA has been criticised by lawmakers and the sector for being slow in processing licence applications and rejecting swathes of applications despite the UK government's push to make London a global criptocurrency hub.

It's no surprise that many crypto firms are still trying to get licences here in the UK, even though some have been denied such licences at the first pass, said Sheldon Mills, FCA executive director for competition and consumers at a City Financial conference.

Mills said that they know we have a good system of regulation and if they meet our standards that's important for every jurisdiction they apply for around the world.

It is a benefit to the UK economy and UK financial service industry, and is good for competition, inward investment and growth. The FCA has been scrutinising firms for their ability to stop their operations from being used for money laundering or financing terrorism.

In March, the FCA said 90 per cent of the firms seeking approval for their anti-money laundering controls have been refused or withdrawn because they could not meet the standards.

Mills said 95 people have been hired to the watchdog's authoring team and the pending caseload has fallen by 40 per cent.

Mills said that we expect faster, better decisions to support us in bringing down the costs of the regulatory system over time.

Jean-Marie Mognetti, chief executive of CoinShares, said the company chose to list in the European Union member state of Sweden because Britain and the FCA were not very keen to see any companies in London.

Mognetti said that the European Union's new set of 'MiCA' rules for fully licensing of criptocurrencies will put the EU at an advantage over Britain.

If you talk about attractiveness from a regulated activity perspective, you know that London is not part of MiCA and will not have passporting in Europe. Mognetti said that it was going to be a huge handicap.

Britain will license stablecoins, but leave the rest of the industry for a later date because of a draft law before parliament.