Question to the HM Treasury:

To ask Her Majesty's Government, further to the introduction of anti-money laundering regulations for cryptoasset firms, what assessment they have made of the number of firms not yet registered by the FCA; what discussions they have had with the FCA about this; and what steps they are taking to ensure compliance with the regulations.

As of 24 March 2022, 16 cryptoasset businesses are within the FCA’s Temporary Registration Regime. The FCA have concluded assessment of all firms and are expecting further updates from some of these firms before their temporary registration ends. All firms remaining on the regime are aware of what is required from them to conclude their application.

Treasury officials are in regular contact with their counterparts at the FCA regarding the status of these firms, as well as the anti-money laundering regime for cryptoassets in general. Any decision about whether or not to extend the Temporary Registration Regime beyond 31 March is ultimately a matter for the FCA, exercising their powers under the Money Laundering Regulations.

In addition to existing businesses with temporary registration, the FCA is also assessing the applications of new businesses that wish to enter the market, and has admitted a number of these firms to the full register. The FCA are seeking to process all applications as swiftly as is possible whilst maintaining robust regulatory standards. Both Treasury and the FCA are committed to supporting the growth of the cryptoasset sector in a safe and competitive manner.

Since 10 January 2021, only cryptoasset businesses that have been admitted to either the Temporary Registration Regime or the FCA’s full register are permitted to carry on business in the UK. The FCA have a range of civil and criminal enforcement powers under the Money Laundering Regulations and, as of this month, have over 50 open investigations, including criminal probes, into apparently unauthorised cryptoasset businesses.