The U.K.’s chief financial regulator has announced a new temporary registration regime, covering firms which have already filed applications for licensing with the regulator.
The Financial Conduct Authority (FCA) announced its new temporary regime would run until July 9, 2021, and would apply to existing digital currency businesses who have yet to secure a required license to operate.
Previously, the scheme had been set to expire on January 10, 2021, which would have seen trading businesses forced to shut down until their licensing applications had been reviewed.
According to the FCA, the extended deadline will allow sufficient time for the regulator to review outstanding applications, without any interruption of trade.
“The Temporary Registration Regime is for existing cryptoasset businesses which have applied for registration before 16 December 2020, and whose applications are still being assessed.”
“This is to enable those existing businesses to continue to trade after 9 January 2021 until 9 July 2021, pending the FCA’s determination of their application.”
According to the regulator, it is unable to review applications ahead of the January deadline, “due to the complexity and standard of the applications received, and the pandemic restricting the FCA’s ability to visit firms as planned.”
The new rules only apply to firms with licensing applications filed before December 16, with firms outside of this scope expected to stop trading by the January 10 deadline. Failure to comply with the requirement to stop trading on the date of the January deadline will attract the usual sanctions, with firms “at risk of being subject to the FCA’s criminal and civil enforcement powers.”
The FCA has already received 181 applications for its crypto license, and continues to review a number of active applications. The extended deadline means the FCA can now work through pending applications, without unduly interrupting trade in the sector.