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UK records mass exit of crypto firms after Binance ban

IMF

TL;DR Breakdown

  • Crypto exchange firms halt license application in UK
  • Why firms want to exit UK

Several crypto firms are set to pull out of the United Kingdom. These firms have withdrawn their applications to register with the UK’s Financial Conduct Authority (FCA).

Reuters report on Tuesday that crypto firms in the Uk that have withdrawn their application for license has increased by 25 percent in June.

Previously, 51 crypto firms had withdrawn earlier submitted filings for registration with the FCA at the beginning of the month. An anonymous spokesperson for the regulator told Reuters that 13 more companies are no longer interested in securing a license bringing the total number of withdrawals to 64.

The mass exit of crypto firms comes against the backdrop of the UK placing a ban on top crypto firm, Binance, owing to certain regulatory infractions, according to the FCA.

Why crypto firms want out in the UK

Regulation has become tougher since January 2020, when the FCA instituted a registration scheme for cryptocurrency businesses with an initial deadline of one year. Authorities did this towards ensuring crypto firms’ compliance with Anti-Money Laundering regulations.

However, the registration scheme appears to be a tough process, and authorities had to step it down with a temporary registration regime. Reports also have it that authorities find it hard to keep up with crypto firm registration as there are many backlogs of licensing applications.

Ultimately, crypto firms prefer to pull out of the Uk amid increased regulatory scrutiny on crypto exchanges across several jurisdictions, one of which Binance suffered on Monday.

Implication of crypto-asset firms exit in UK

Withdrawing their application means that they must halt operations in the country or face
incurring fines and legal action by the FCA.

Some other firms not covered under the agency’s AML mandate might be able to continue offering services.

Muhaimin Olowoporoku

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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