UK regulator warns of licensing deadline for digital currency firms

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The U.K. financial regulator has warned all firms conducting “cryptoasset activity in the U.K.” that they have until June 30 to submit applications for a digital currency license.

The Financial Conduct Authority (FCA) said firms need to complete their applications by the end of June, in order to give the regulator time to process applications ahead of the deadline.

The deadline comes ahead of the hard deadline of January 10, 2021, by which time any firm not holding the required license will no longer be permitted to operate.

The 30 June date allows the FCA to review submitted applications and raise any follow-up questions with firms, with enough time for that process to be completed before 10 January 2021.

The need for crypto firms to register with the regulator comes in response to the U.K. adopting the Financial Action Task Force’s “Travel Rule,” which requires firms to spell out how they intend to meet their new obligations under anti-money laundering procedures.

The Travel Rule requires regulated parties to digital transactions to exchange identifying information about those transactions, in a bid to prevent and detect money laundering through digital assets.

In 2019, the regulator brought forward guidance for digital currency businesses, spelling out which activities fall within its remit. Since 2018, the FCA has been working with digital currency firms in a regulatory sandbox, allowing startups freedom from regulation to test different products and innovations.

The licensing scheme requires all firms to have submitted and had applications processed by the regulator ahead of the January 2021 deadline, with early submission advised to ensure ample time for application materials to be considered.

The news follows the FCA’s appointment of new chief executive, Nikhil Rathi, earlier this week. Formerly of the London Stock Exchange, Rathi has previously spoken about the increasing role of blockchain in powering stock market and exchange infrastructure in future.