Manuel Fajardo
Plenitude Insights
Digital Assets
Digital Assets/Crypto
AML/CTF/CPFIn January 2023, the UK’s Financial Conduct Authority (FCA) published much-awaited guidance on what constitutes good and poor practice for registration applications. Crucially, it included an interesting figure: only 15% of the about 300 applications received, as of that time, had been successful. Unfortunately, regulators in other countries, such as France and Hong Kong, have not published equivalent figures. However, industry discussions and anecdotal evidence suggest that the registration path is an arduous one, not only in terms of low success rates, but also in terms of overall time commitment, making guidance like the FCA’s very welcome.
With the vast amount of scattered, and not always clear, information available, those undertaking the registration process may not always have a clear picture of what is needed to submit a complete and successful application. Our purpose with this paper is to parse existing guidance and other publicly available information in select jurisdictions (the UK, France, and Hong Kong) and translate it into a practical guide which can help Crypto Asset Service Providers (CASPs) have a higher probability of success when submitting an application.
Conclusion
Reading through the requirements of a registration process may seem like a daunting task, and for firms that are new to operating as a regulated firm, many of the components may seem unfamiliar. However, understanding the rationale for these, and seeing them as trust-building exercises for regulators, can help applicant firms go through the process with the right mindset.
Registration is only the beginning of life as a regulated firm. Many of the decisions taken at this stage and the investment involved in designing a sound compliance framework are the way to lay strong foundations to run the business after registration is obtained. Above all, these foundations will enable your firm to anticipate and comply with the more stringent requirements.
