FCA Revises Application Charges for the UK Crypto Service providers
The UK Financial Conduct Authorities (FCA) has amended the fee structure for Crypto-related businesses. As per the newly devised rules, the Financial Conduct Authorities (FCA), has proposed reduced charges for the crypto startups.
The new charging structure will be based on the amount of income generated by the companies. Last year the FCA had proposed £5000 for all crypto companies. But now it has segregated different charge structure for big and small firms.
Companies with net income up to £250000, will pay £2000($2600) registration fees whereas companies with net income over £250,000($325,000) will have to pay £10,000($13,000).
Last year, when the FCA had proposed equal charges for the large and small firms, the small firms, mostly the startups had objected to the fee structure. FCA then had consulted various crypto firms regarding the changes in the fee structure. Some respondents had suggested negligible or no regulatory fee at all for the startups.
But the FCA had replied that the parliament has ordered them to regulate all the crypto-related businesses and has mandated all regulated businesses to pa regulatory fees as a contribution towards the supervision of the companies. The FCA stated, “We estimate the total cost of this process at approximately £400000 and we are aware of some 80 potential applicants. We accordingly propose to set the registration fee at £5000.
FCA has now given a concession to the smaller Crypto firms, and simultaneously it has raised the charges for bigger companies.
The Extended Role of FCA
In October 2019, the FCA had released a consultation paper proposing the recovery of the lapse cost under the country's new regulations following the European Union’s fifth Anti-money laundering Directives (AMLD5).
With new accountability taken from January 10, the FCA has started monitoring the Anti-money laundering and counter-terrorist financing activities of the crypto companies. Official reports revealed that FCA henceforth will be playing a significant role in the regulations of the industry. As per the economic crime plan 2019- 22, it will release guidelines to eliminate money laundering and terrorist financing through Digital assets.
The changes in the fees structure came into force from January 13 and accordingly the agency has dictated all the crypto companies to register themselves with FCA by January 10, 2021.
CBW - External Analyst