UK FCA warns 450 cryptocurrency firms: 87% not compliant!

The Financial Conduct Authority (FCA) of the United Kingdom recently released its 2023-24 annual report, revealing that over 87% of cryptocurrency companies' registration applications have been rejected, withdrawn, or refused. In the report, the FCA detailed new regulations for cryptocurrency marketing and issued warnings to 450 companies engaged in illegal promotion of cryptocurrencies at the beginning of 2024.

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The FCA has strengthened consumer protection and cracked down on financial crimes related to cryptocurrencies. The annual report indicates that over 87% of cryptocurrency registration applications have been rejected, withdrawn, or refused.

The FCA stated: "We hope to communicate clearly with cryptocurrency companies applying for registration, helping them understand how to properly promote their business and avoid marketing it incorrectly. So far, we have also assisted 44 cryptocurrency companies in meeting the anti-money laundering registration requirements."

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FCA Strengthens Cryptocurrency Marketing Regulations

The FCA has also enhanced new marketing regulations for crypto assets, which will come into effect in early 2024, aiming to strengthen consumer protection. These regulations include providing a 24-hour cooling-off period for investment users and categorizing cryptocurrencies as "restricted mass market investments."

The report emphasizes: "Within three months of implementing the regulations, warnings have been issued to 450 companies illegally marketing crypto assets."

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The FCA states that these measures are to ensure that companies promote cryptocurrencies in a clear, fair manner, eliminate any misleading content, and ensure compliance with standards to protect users from investing in high-risk products and avoid being scammed. Below are some of the contents released by the FCA.

• 24-Hour Cooling-Off Period: Helps users assess their investment decisions calmly before investing.
• Product Suitability Assessment: Provides a comprehensive suitability assessment for different users.
• Additional Maintenance for Crypto Assets: Provides additional protection measures for crypto asset users.
• Financial Crime Regulation: Conducts financial crime fines, credit market research, anti-money laundering measures.
• Legal Authorization: Enhances market integrity protection to ensure companies are legally authorized.

As shown in the figure below: The FCA has revoked the licenses of 1,261 companies in the 2023/24 financial year, which is double the number from the previous year. Over 87% of cryptocurrency registration applications have been rejected, withdrawn, or refused by the FCA.

FCA Comprehensive Fight Against Financial Crimes, Promoting Cryptocurrency Regulatory Standards

The FCA stated that since April 2023, it has conducted multiple reviews and implemented new regulations and measures targeting high-risk investment firms.

The FCA remains committed to combating money laundering, cryptocurrency fraud, and other cases. It also stated that it will continue to collaborate with international organizations to establish global cryptocurrency regulatory standards. The FCA added, "We continue to play a vital role globally, participating in the development of international standards in areas such as cryptocurrencies, sustainable development, and non-bank finance."