Cryptocurrency companies in the UK fail money laundering test
2 min readTL;DR Breakdown
• The Governor of the Bank of England is against cryptocurrencies.
• Cryptocurrency companies will have a new opportunity to apply.
Over fifty cryptocurrency companies are in trouble in the UK for failing money laundering test. The financial conduct authority announced that several companies had withdrawn their applications for temporary permits since they were not approved. These companies have two options: to work without being regulated by the UK or to withdraw from the crypto market.
In previous months, companies had been warned to repudiate requests from criminals seeking to launder money on their platforms.
Cryptocurrency companies without permission must stop operations
Cryptocurrency companies that have withdrawn from the permitting process must stop lending operations immediately. This law will allow companies to comply with the standards stipulated by the UK. If companies refuse to close, they could face fines or arrests from the FCA.
Many regulators around the world have taken similar steps to fight cryptocurrency money laundering. A month ago, the Chinese government prohibited banks from trading cryptocurrencies to prevent illegal acts.
Andrew Bailey, Bank of England governor, has been against the decentralized market since its inception. Although Bailey doesn’t get directly into cryptocurrency companies, he thinks trading is a total waste of time.
Cryptocurrencies are not endorsed by UK authorities who can help investors get their money back. Bailey argues that investors should be prepared to lose their money on these investments.
Central Bank of Europe opinions
Speculation on cryptocurrencies has been so high that even the European Central Bank has spoken out against them. The highest authority believes that the rise of BTC is nothing more than a financial bubble that would, at some point, burst.
Although the opinions on commerce and cryptocurrency companies are primarily bad, other companies support them. Standard Chartered and Goldman Sachs have supported the decentralized market, even creating their trading room to take advantage of their capitalization.
BTC price has plummeted 40% since hitting its all-time high of $64,000 in April. For now, the cryptocurrency is trading at $38,000.
Although many cryptocurrency companies have pulled out due to requests from regulators in the UK, others remain in the game. Affected companies will have a second chance to apply if they comply with the no money laundering policies.
Businesses dedicated to approved cryptocurrencies can continue their trade in the UK. This measure may start a new landscape of UK regulations imposed on cryptocurrencies.
