The current situation is prompting industry concerns of an impending exodus and an unfair advantage awarded to those stationed overseas.
The Financial Conduct Authority currently plans to shutter its temporary registration regime for crypto asset businesses on 31 March, leaving some of the country’s industry players in limbo. Twelve firms including crypto custodian Copper Technologies and digital bank Revolut remained on the temporary register, and face having to suspend their services if they don’t gain approval before the deadline.
The FCA has taken a tough stance on crypto regulation as demand for digital assets among retail investors spiked significantly over the last two years, with only 33 firms achieving permanent registration with the body. Britain’s top financial authorities, including the Bank of England and the Treasury, have stepped up scrutiny over the sector in recent months, keeping a keen eye on banks and investment firms chasing the hype around Bitcoin and other tokens.
While the FCA may yet extend its deadline after an earlier delay in June, some crypto companies have already started the process of moving their operations abroad to be able to continue servicing UK customers, targeting nearby European destinations such as Croatia and Switzerland.