UK Crypto Registration Applications Fall 51% over Three Years: FCA Data

Purposes to register as a supplier of crypto asset exchanges or custodial wallets have fallen by 51% over the previous three years, in keeping with knowledge obtained via a Freedom of Data (FoI) request from world legislation agency Reed Smith.

The Monetary Conduct Authority (FCA) reported that solely 29 purposes have been submitted between Might 1, 2023 and April 30, 2024. This can be a lower in comparison with 42 purposes within the earlier yr and 59 within the yr earlier than. There have been solely seven purposes within the first quarter of 2024, the second lowest quarterly determine up to now three years.

The typical time for software approval over the previous three years is 459 days. Trade specialists have expressed concern that this sluggish tempo might hinder Britain’s broader aim of changing into a worldwide cryptocurrency hub. The prolonged approval course of might discourage potential candidates and undermine confidence within the regulatory framework.

Prior to now three years, 186 firms have withdrawn their purposes. Nonetheless, the variety of admissions has fallen considerably: by 78% final yr in comparison with the 2021-2022 interval. This decline means that candidates could also be gaining a greater understanding of the FCA’s necessities and expectations, leading to fewer withdrawals.

Withdrawal and software data

The info supplied by the FCA highlights a number of key tendencies. 29 purposes have been submitted final yr, in comparison with 42 in 2022-2023 and 59 in 2021-2022. In the identical interval, twenty firms withdrew their registration purposes, in comparison with 73 in 2022-2023 and 93 in 2021-2022.

“The excellent news is that the declining variety of purposes signifies that firms are actually a lot better knowledgeable about what the regulator expects,” mentioned Brett Hillis, accomplice at Reed Smith.

“This may solely be a optimistic improvement and would additionally clarify the drop in approval occasions because the FCA has to spend much less time sifting via poor high quality purposes. Nonetheless, it’s clear that there’s room to speed up additional.”

The typical time it took to approve purposes final yr was 311 days, an enchancment from 497 days the earlier yr. As of 2021, the FCA has spent the equal of 25 years assessing crypto-asset purposes.

Because the new monetary promotion guidelines got here into drive in October 2023, the FCA has recognized 1,010 breaches within the first seven months to April 2024. The introduction of those guidelines has led to elevated supervision and enforcement actions within the sector.