More than 60 cryptocurrency companies prepare to leave the UK as FCA application withdrawals skyrocket

• Cryptocurrency companies are poised to leave the UK as 64 companies have withdrawn their applications to conduct business.
• The FCA required digital asset companies to register with the regulator before operating in the country since January.
• Slow application approvals have led many companies to withdraw their applications from the FCA.

More than 60 cryptocurrency companies have withdrawn their applications with the Financial Conduct Authority (FCA) to do business in the UK as the country continues to tighten regulations on cryptocurrencies.

FCA Cracks Down On Cryptocurrencies As Retail Demand Increases

The FCA registration data showed that around 64 cryptocurrency-related companies had withdrawn their applications, an increase of 51 in early June. Since these companies have retracted their applications, they will not be allowed to operate in the country.

As of January, companies doing business in cryptocurrencies must register with the regulatory body before operating. Due to the immense volume, the regulator extended the temporary registration regime for digital asset companies.

Since the beginning of June, The FCA noted that more than 100 crypto-related companies are not yet registered. The approval process has been lengthy, and of the numerous applications submitted, the UK regulator only gave the green light to six companies, including Gemini and Arca.

Dozens of other companies are still being evaluated, although they are not yet deemed “fit and suitable,” according to the watchdog. The regulator is increasing temporary relief for cryptocurrency companies until March 2022.

The FCA is starting to show hostility towards cryptocurrency companies, issuing a warning against major cryptocurrency exchanges last week. The financial watchdog stated that the main digital asset exchange platform, Binance, is operating illegally in the country.

Binance withdrew its application for registration with the FCA in mid-May, which may have led to the issuance of the recent warning. A Binance spokesperson said the company is working closely with the British regulator to increase the safety and sustainability of the industry.

While the country tries to clamp down on the new asset class, the FCA’s chief compliance officer noted that 111 unregistered cryptocurrency companies have been operating in the country. This comes at a time when the demand for digital assets is increasing, as the number of adults owning cryptocurrencies in the country has reached 2.3 million..