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As the cryptocurrency industry grows, regulators are putting more pressure on it. One of the main pressures on cryptocurrency companies is the need for proper KYC controls and identity verification.
Warning to Cryptocurrency Companies
According to a recent statement and research, a large majority of cryptocurrency companies in the UK are accused of failing to perform these controls. In a statement by SmartSearch, it was revealed that many of the 500 financial institutions did not carry out these controls. According to the information provided, only 28% of these companies perform the necessary checks.
The research also found that 70% of high-profile banks, 56% of mid-level banks, and only 13% of low-profile banks carry out these controls. This means that cryptocurrency companies are in a much worse situation. Martin Cheek, the director of SmartSearch, emphasized the importance of customer identification controls and highlighted the significance of the KYC factor.
FCA Increases Penalties for Cryptocurrency Companies
The UK’s financial regulator, FCA, has warned cryptocurrency companies to take the necessary precautions. Serious penalties have been imposed on cryptocurrency companies by the FCA in the past, and warnings have been issued to these companies.
Earlier this year, British officials stated that 85% of cryptocurrency companies had applied for licenses in the country, but the reviews were ongoing. The main reason for the prolonged reviews is to assess whether companies meet their legal obligations.
The pressure on cryptocurrency companies has increased, especially in the US, and numerous lawsuits have been filed against companies by the US. US officials, who claim that most cryptocurrencies are securities, have sparked a trend of companies escaping to other countries. The UK is among the countries that have received significant demand, leading institutions like the FCA to increase pressure and take steps to maintain regulation.
Countries that provide suitable conditions for cryptocurrency companies can certainly benefit from this migration.
