UK regulator tells unregistered crypto firms to shut down

The Financial Conduct Authority has told unregistered crypto firms to close down and return funds to investors, in line with a schedule laid out by the regulator at the start of 2020.

On January 8, the UK watchdog warned that crypto businesses that had not applied to register with the FCA by December 15, 2020, or that had withdrawn an application, must cease crypto activities before January 10.

In an email sent to companies and obtained by The Block, the FCA wrote that businesses “should consider all the relevant issues carefully and, where possible, return any money or cryptoassets” that fall under the scope of anti-money laundering rules.

The email stated:

"Any existing cryptoasset businesses carrying on cryptoasset activities within the scope of regulation 14A of the MLRs by way of business in the UK is required to be registered with the FCA for anti-money laundering and counter-terrorist financing purposes by 9 January 2021. If you are an existing cryptoasset business that is still carrying on cryptoasset activities in the UK and fall within either of the categories mentioned in the bullet points above, you are required to cease such activities before 10 January 2021."

The FCA took over as the anti-money laundering and counter-terrorist financing supervisor of UK crypto companies on January 10, 2020, warning at the time that firms would have to register with it by the same date the following year. It recently extended that deadline to July 9, 2021, after placing some 90 companies on an interim register.

The FCA said in its email that it expects crypto firms to communicate the situation to customers, as well as to “provide them with any alternative options that are in their best interests."

“You should seek your own legal advice on how to do this. You may be committing a criminal offence from 10 January 2021 if you continue to provide services involving cryptoassets. If so, you are at risk of being subject to the FCA’s criminal and civil enforcement powers,” the regulator added.

Earlier today, the FCA issued a stern warning about the “very high risks” faced by consumers who invest in cryptocurrencies.