The Financial Market Conduct Authority (FCA) has issued a handbook notice detailing the recent crypto asset business rules in the UK.
Since January 10, 2020, FCA has been the anti-money laundering and counter-terrorism financing (AML / CTF) regulator of the UK's crypto assets business under the Money Laundering, Terrorist Financing and Fund Transfer (Payer Information) Regulations 2017 (MLRs) . The revised MLRs will also implement the European Union (EU) No. 5 Anti-Money Laundering Directive (5MLD) in the UK.
In October 2019, the FCA consulted on the fee structure it proposed to introduce to recover the cost of establishing and implementing the new system. At the time, the FCA proposed a flat rate of £ 5,000 for registered companies to recover about £ 400,000 from about 80 potential applicants.
Based on the comments received, the FCA has now revised its recommendations and the Commission has determined the following application fees:
- £ 2,000-businesses with less than £ 250,000 in crypto asset activity in the UK
- £ 10,000-businesses with a UK crypto asset activity earning more than £ 250,000
The FCA explained that the roundtable with the crypto asset company on October 18, 2019 received an important message that the £ 5,000 registration fee was too high for small companies and startups.
The regulator pointed out that at this stage, it is mainly to register already operating companies, although new companies can also apply for registration. No matter how much indirect costs they have to pay, they will not include FCA registration fees in their business plan when deciding whether to start operations. Therefore, the FCA believes that given that they will have to make many adjustments to their operating model, it is reasonable to make concessions for them.
As a result, the agency lowered the registration fee for companies with a UK crypto asset income of up to £ 250,000 to £ 2,000. To make up for the loss of revenue, it raised the fees of large companies to £ 10,000.
Some interviewees believe that small businesses should not pay and others suggest that they should not be regulated at all.
In response, FCA responded:
"Parliament has instructed us to supervise all crypto-asset companies that operate within the law, and there is no limit on the size. We cannot choose who to supervise. It is fair that all supervised companies should bear the cost of supervision."
The FCA also said that some of the smallest brokers, especially those that describe their activities as hobbies, may not operate "commercially", in which case they may not need to be under registered. They should refer to the section of the FCA website on activities conducted in a commercial manner to consider whether they are eligible to register and to receive independent legal advice if necessary.
The FCA emphasized that if the regulator refuses to register a company, its application fee will not be refunded. If the applicant is not eligible for registration, the application should not be filed as soon as possible, and the FCA will consider refunding the fee, provided that the company can prove that it has done its best to clarify the status before the application.
The FCA said that if companies appear to have been using their platform to test their eligibility, they will not refund fees.