FCA speeds up crypto companies registration amid a decline in applications, falling 69% from 2022/23 to 2023/24, down from 511 to 158 days. However, approvals also fell from 17.4% on 22/23 on 2024 to 11.5%, so it’s not that easy. In particular, 8 people were approved in 2022/23, with 6 people approved on 23/24 and 3 people approved 24/365 days a year, but the total number of applications submitted fell from 46 people in 2022/23 to 28 people in 2023/24 and 26 people in 2024/25.
Accelerating procedures, but will the industry be less interested?
The reduced review time certainly encourages and shows the growth of internal expertise and resources on the part of regulators. According to Cryptouk:
“Cryptouk and its 200 members continue to work closely with regulators, governments and other policymakers. The industry recognizes how important it is for the FCA to meet its regulatory roadmap, and the digital asset business is keen on a full legal framework.”
Simon Jennings, executive director of the UK Cryptoasset Business Council, is also looking at the impact of cumulative experience and the new secondary mandate of regulators on growth and competitiveness.
“The FCA itself has built up the knowledge and resources internally that will make things faster and faster, and as new quadratic goals on growth and international competitiveness are beginning to filter, the system feels a little less stuffed than before.”
However, numbers are still vague and while the UK doesn’t seem to be the most advantageous jurisdiction for crypto companies at this time, the improvement process is clearly accelerated. The UK government has announced plans to introduce “robust” legislation in the crypto market. The FCA has launched consultations on minimum standards for businesses to build resilient and competitive sectors and regain lost status compared to other jurisdictions.
Reed Smith’s partner Brett Hillis points to the potential transitions by many companies, from the registration system to full approval.
“Companies that have obtained a CryptoAsset company registration may need to upgrade to full FCA authentication once the scheme is extended to encryption.”
“Even if things have improved beneath the surface, there is still a sense that the process is tedious and leaning, especially among small and medium-sized businesses in the market.”
He also highlights competitive dynamics between jurisdictions.
“We can’t ignore the global painting. Regulators from MAS to Vara are actively courting, deploying and relocating red carpets. If the UK wants to lead, they need to chase that competition.”
The UK continues to move to cryptography
The numbers may seem vague, and regulatory improvements have yet to be completely ruled out by the market, but reducing average review time to 158 days is a major achievement.
However, the final composition of the market will depend on the content of the FCA minimum standards and the parameters of future legislation, and how quickly the regulator eliminates the remaining sense of the complexity of the excess process between applicants.
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