Last week, digital trading app Revolut registered with the U.K.'s top financial regulator, bringing to an end the “temporary registration regime” (TRR), a program that allowed crypto companies to operate in the country while they are waiting for full regulatory approval.
Revolut was the only company from the five that were left on the list to qualify for full registration. Crypto firms seeking to operate in the U.K. must now go through a full registration process with the Financial Conduct Authority, the country’s primary financial regulator, a spokesperson from the FCA said.
Crypto firms, however, have been complaining about the FCA’s delays in processing applications. Those delays led to some companies dropping out of the process last year.
“If a firm is able to satisfy us that it meets the conditions for registration, we will register them,” the FCA said in an email to CoinDesk. “It’s a two-way street, so the time it takes to register a firm, and whether they’re registered at all, depends on the quality of the information provided to us. Thirty-eight firms have successfully done so.”
In April, the U.K. government said that it wanted to turn the country into a global crypto hub, and the government’s commitment was reiterated by new Prime Minister Liz Truss’ government. The same month, the FCA said it had been critical of crypto and wanted to move forward with a balanced approach. Since then, it has hosted several “crypto sprints” to hear from the digital-asset industry. But despite the regulator's efforts to support the crypto industry, only five companies have managed to register since April.
The TRR regime
Although the FCA had set a deadline for companies on the TRR list to try to get full approval by March 31, a select few companies like Revolut were allowed to stay on the list past that date. The FCA didn’t provide any details on why the deadline was extended for some companies, but said the firms may have been pursuing an appeal or had “particular winding-down circumstances.”
By April 8, five companies out of the 106 that were initially on the list were still operating under the TRR regime’s auspices. Those included crypto exchange CEX.io, digital bank Revolut, digital asset-trading platform GlobalBlock, digital asset custody provider Copper.co and crypto wallet and payment platform Moneybrain.
By June 30, Revolut was the only company remaining on the list and ended up being the only one to receive approval from the FCA. The other four companies have opted to register elsewhere and operate outside the U.K.
GlobalBlock planned to come off the TRR regime because it felt the FCA was “not ready” for crypto companies at that point, CEO Rufus Round told CoinDesk in an interview in April. Round added that the regulator hadn’t approved its application for at least 18 months.
The company saw a better opportunity with the European Union, which finalized its markets in crypto assets (MiCA) legislation in September, Round said. GlobalBlock announced that in May it had registered in EU member Lithuania via its subsidiary GlobalBlock Europe.
Copper is still in talks with regulators across the jurisdictions the company is operating in, including the U.K., Carly Nuzbach Lowery, the firm’s chief legal officer, said in an email to CoinDesk in July. Copper’s subsidiary received a stamp of approval in Switzerland when it was added to the country’s Financial Services Standard Association, a self-regulatory body recognized by the Swiss Financial Market Supervisory Authority, Lowery said.
CEX formally withdrew its application on May 31, according to Jonathan Wykes, managing director of U.K. and Europe at the firm. It has moved users located in the European economic area and the U.K. to its British Virgin Islands subsidiary CEX Overseas Ltd.
Firms serving U.K. customers should be regulated with the FCA, but the regulator is waiting for crypto to be added to the financial promotions rules to stop firms that aren’t authorized from advertising to U.K. customers.
Moneybrain didn’t respond to a request for comment.
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