Crypto Industry Faces Hurdles: FCA Report Shows High Rejection Rate Due to AML Failures

As we know, the bull market in the Web3 industry still hasn’t arrived, sparking many debates and discussions among crypto enthusiasts, analysts, and well-known media figures. Each group gives different predictions about when this rally might start, which raises even more questions and uncertainty. However, changes in this rapidly evolving financial space are already noticeable, especially from regulators actively working on introducing new rules and guidelines.

In today’s news article, Coinmooner would like to share important information about the actions of one of the most influential regulators in the UK. This authority recently published a report containing data on many rejected applications from crypto companies. The main reason for these rejections is the lack of critical components needed for a complete and thorough assessment of the applications, highlighting the strict standards set by the regulator.

According to the 2024 Financial Conduct Authority (FCA) report, over 90% of cryptocurrency companies failed to meet the required standards, including anti-money laundering (AML) regulations. Only four of 35 submitted registration applications were approved, while the rest were rejected. The main reason for the refusals was insufficient measures to combat money laundering through crypto platforms, showing how seriously the regulator takes financial transparency and security in the crypto industry.

UK’s FCA Enhances Crypto Regulations: Stricter Application Process and Fraud Awareness

As is well known, the FCA (Financial Conduct Authority) is the financial regulator in the UK, responsible for overseeing financial markets, monitoring financial institutions, and protecting consumers. The FCA regulates various financial services, including banks, investment companies, insurers, and, more recently, cryptocurrency companies. The organization's primary goal is to ensure fairness and transparency in the financial market, protect consumer rights, and prevent financial crimes such as money laundering and fraud.

Coinmooner decided to explore more essential details about this event. We learned that in June 2023, the authority introduced rules for promoting cryptocurrency services, requiring companies to publish risk warnings. This ensures that digital asset advertising in the UK will be fair and won't mislead investors.

The regulator also noted that the British public has become more aware of crypto-related scams: 63% of consumers reported fraud before investing in a crypto project. This is 5% more than the previous year. According to recent data from the law firm Reed Smith, over the past three years, the number of registration applications submitted to the FCA by crypto exchanges has dropped by 51%. Experts pointed out that the authority is taking too long to process applications from crypto companies.

This report shows that verifying companies for integrity is essential for regulators, which is a genuinely positive step in making the Web3 industry safer for everyday users. Despite this, we urge our readers to always use the most advanced protection methods in the crypto industry, ensuring safer use of this financial sector and its opportunities.