51 CRYPTO FIRMS WITHDRAW LICENSING APPLICATIONS IN THE UK

Last updated: June 19, 2025, 19:45 | Written by: Joseph Lubin

The UK's ambition to become a global crypto hub has hit a significant snag.A recent report reveals that a staggering 51 crypto firms have withdrawn their licensing applications from the Financial Conduct Authority (FCA). يبدو أن قوانين مكافحة غسيل الأموال الصارمة في المملكة المتحدة تشكل عقبة تشغيلية رئيسية لشركات التشفير في البلاد.This mass exodus signals a potential crisis for the UK's crypto landscape, raising questions about the feasibility of operating within the current regulatory framework.The primary reason cited for these withdrawals is the inability of these firms to meet the FCA's stringent Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) standards. Strict Anti-Money Laundering laws in the United Kingdom appear to be constituting a major operational hurdle for crypto firms in the country.These standards, while designed to protect consumers and maintain the integrity of the financial system, are proving to be a major hurdle for many crypto businesses. 13 more crypto firms withdraw licensing applications in the UK The United Kingdom Financial Conduct Authority s (FCA) crypto licensing regime is reportedly proving arduous for cryptocurrencyThis development could force some firms to cease operations in the UK altogether, potentially impacting investment and innovation within the sector. However, some companies not covered under the agency s AML mandate might be able to continue offering services. Earlier in June, the FCA issued a notice to U.K. consumers about 111 unregistered crypto companies in the country. Related: 51 crypto firms withdraw licensing applications in the UK. The raft of withdrawn applications comes amidThe FCA's rigorous approach underscores its commitment to tackling financial crime, but it also raises concerns about whether the UK risks becoming overly restrictive, potentially driving crypto businesses to more lenient jurisdictions.

The FCA's Stance: Anti-Money Laundering and Crypto Regulation

The FCA's uncompromising stance on AML and CTF is at the heart of the issue. The inability to satisfy Anti-Money Laundering standards set by regulators in the United Kingdom is reportedly forcing many crypto companies out of business.The regulator is determined to prevent the use of crypto assets for illicit activities, and it has implemented strict rules to ensure that crypto firms have robust internal controls in place.These controls include:

Customer Due Diligence (CDD): Verifying the identity of customers and understanding the nature of their transactions.
Transaction Monitoring: Monitoring transactions for suspicious activity and reporting any concerns to the relevant authorities.
Risk Assessment: Identifying and assessing the risks associated with different crypto assets and customers.
Reporting Obligations: Reporting suspicious activity to the FCA and other regulatory bodies.

The FCA expects crypto firms to demonstrate a comprehensive understanding of these requirements and to implement effective systems and controls to mitigate the risks of money laundering and terrorist financing. Four firms out of 35 that applied for crypto licenses got registered in the UK in 2025 fiscal year. The FCA blames failure rate on inability of firms to meet application standards. Crypto stakeholders claim the long wait times and tough regulatory stance are the major challenges.This rigorous approach is reflected in the high rate of application withdrawals, rejections, and refusals. Companies that fail to meet the FCA s AML requirements by the end of the registration window will also be forced to refund all customer deposits. Get access to our best features Get StartedIn its 2025 annual report, the FCA revealed that over 87% of crypto registration applications met this fate.

Why Are Crypto Firms Struggling to Meet the FCA's Standards?

Several factors contribute to the difficulties faced by crypto firms in meeting the FCA's AML standards. 51 CRYPTO FIRMS WITHDRAW LICENSING APPLICATIONS IN THE UK. A large number of cryptoasset firms applications are not meeting the FCA s criteria for AML/CTF internal controls.These include:

Complexity of AML Regulations: AML regulations are complex and constantly evolving. According to a report by The Guardian, 51 companies have so far failed to meet the FCA s AML standards and may be forced to cease operations in the country. By withdrawing their license applications, these crypto firms must stop all crypto-related services or risk fines and legal action by the FCA.Crypto firms need to have a deep understanding of these regulations and the resources to implement them effectively.
Lack of Resources: Many crypto firms, particularly smaller startups, lack the resources to invest in the necessary systems and controls to comply with the FCA's requirements.
Novelty of Crypto Assets: The relatively new nature of crypto assets makes it difficult to assess the risks associated with them.This can make it challenging for crypto firms to develop effective AML programs.
Stringent Requirements: The FCA's requirements are widely considered to be among the most stringent in the world, posing a significant barrier to entry for many firms.

The long wait times associated with the application process are also a major pain point for crypto stakeholders.This uncertainty can make it difficult for firms to plan their operations and attract investment. ί ί ύ ά ί ό ό ά ό έ ί ό έ έ έ ί ά έ ί άFurthermore, the constantly evolving regulatory landscape adds another layer of complexity, requiring firms to adapt quickly to new rules and guidelines.

The Impact of Withdrawing a Crypto License Application

The consequences of withdrawing a crypto license application are significant. Copper Technologies, a cryptocurrency custody firm backed by Barclays, has withdrawn its application for a UK crypto license, citing intensified scrutiny from the Financial Conduct Authority (FCA). The move comes as the FCA continues to enforce strict licensing rules, with over 87% of crypto applications being rejected, refused, or withdrawn inOnce a firm withdraws its application, it must cease all crypto-related services in the UK.Failure to do so can result in fines and legal action by the FCA.Specifically:

Cessation of Crypto Services: The firm must immediately stop offering any services involving crypto assets to UK customers.
Potential Fines: Non-compliance can lead to substantial financial penalties imposed by the FCA.
Legal Action: The FCA may pursue legal action against firms that continue to operate without the necessary authorization.
Refund Obligations: Companies failing to meet AML requirements by the end of the registration window might be forced to refund all customer deposits, a potentially devastating outcome.

However, it's important to note that some companies not covered under the FCA's AML mandate might be able to continue offering services.This usually refers to companies offering services that don't involve the exchange or custody of crypto assets, such as providing educational resources or market analysis.

Case Study: Copper Technologies and the UK Crypto Landscape

The withdrawal of Copper Technologies, a cryptocurrency custody firm backed by Barclays, highlights the challenges faced by even well-established players in the UK crypto market. 51 crypto firms withdraw licensing applications in the UKCopper Technologies' decision to withdraw its application underscores the intensified scrutiny from the FCA and the difficulty of navigating the complex regulatory landscape.

Copper Technologies is a significant player in the crypto custody space, providing secure storage solutions for institutional investors.Their decision to withdraw their application despite their resources and expertise suggests that the FCA's requirements are proving to be a significant obstacle for even the most sophisticated firms.

Alternative Jurisdictions: Are Crypto Firms Moving Elsewhere?

The stringent regulatory environment in the UK raises concerns about whether crypto firms are moving to more lenient jurisdictions. Bitcoin vs. Marx: Two Competing Geopolitical Domino Theories Marxism and Bitcoin have one thing in common, the idea that a radical change in the structure of society will happen iSeveral countries are actively seeking to attract crypto businesses, offering more favorable regulatory frameworks and lower compliance costs. According to a report by The Guardian, 51 companies have so far failed to meet the FCA s AML standards and may be forced to cease operations in the country. By withdrawing their licenseThese jurisdictions include:

Switzerland: Known for its pro-crypto stance and established legal framework for digital assets.
Singapore: A leading financial hub with a progressive approach to crypto regulation.
Malta: Previously known as ""Blockchain Island,"" Malta has sought to create a welcoming environment for crypto businesses, though it's reputation has been somewhat tarnished in recent years due to regulatory concerns.
United Arab Emirates (UAE): Actively developing its crypto ecosystem, particularly in Dubai, with clear regulatory frameworks to attract investment.

The exodus of crypto firms from the UK could have a negative impact on the country's competitiveness and its ability to attract investment in the crypto sector. The FCA s stringent requirements for securing a crypto license have been a significant challenge for firms operating in the UK. In its 2025 annual report, the FCA revealed that over 87% of crypto registration applications were withdrawn, rejected, or refused.If the UK becomes perceived as an overly restrictive jurisdiction, it could miss out on the opportunities presented by the growing crypto industry.

What are the Key Challenges Crypto Firms Face in the UK?

Here's a breakdown of the primary obstacles preventing successful FCA registration:

AML/CTF Compliance

This is by far the biggest hurdle. BTCUSD Bitcoin 51 crypto firms withdraw licensing applications in the UKFirms must demonstrate robust systems and controls to prevent money laundering and terrorist financing. The inability to satisfy Anti-Money Laundering standards set by regulators in the United Kingdom is reportedly forcing many crypto companies out of business. Wednesday, Ap About usThe FCA expects a high level of sophistication in these systems, often exceeding what smaller or less experienced firms can deliver.

Long Wait Times and Application Process

The application process is lengthy and complex, often taking months or even years to complete.This creates uncertainty for firms and can delay their entry into the UK market.Stakeholders report this as a major challenge.

Evolving Regulatory Landscape

Crypto regulations are constantly evolving, making it difficult for firms to keep up.Changes in rules and guidelines can require significant adjustments to compliance programs.

Lack of Clarity and Guidance

While the FCA has published some guidance on crypto regulation, some firms feel that more clarity is needed.Uncertainty about how the rules apply to specific business models can make it difficult to comply.

What Can Crypto Firms Do to Improve Their Chances of Securing a UK License?

For crypto firms still determined to operate in the UK, here are some actionable steps to improve their chances of securing a license:

Invest in Compliance: Allocate sufficient resources to build a robust AML/CTF program.This includes hiring experienced compliance professionals and implementing appropriate technology solutions.
Seek Expert Advice: Engage with legal and compliance experts who specialize in crypto regulation.They can provide guidance on how to meet the FCA's requirements and navigate the application process.
Engage with the FCA: Proactively engage with the FCA to understand their expectations and address any concerns.Building a positive relationship with the regulator can be beneficial.
Prepare Thoroughly: Ensure that the application is complete and accurate.Provide all the information requested by the FCA and address any potential issues upfront.
Focus on Risk Management: Develop a comprehensive risk management framework that identifies and mitigates the risks associated with your business model and the crypto assets you handle.

Consumer Protection and the Role of the FCA

The FCA's primary objective is to protect consumers and maintain the integrity of the financial system.Its stringent approach to crypto regulation is driven by concerns about the risks associated with crypto assets, including:

Volatility: The price of crypto assets can be highly volatile, leading to significant losses for investors.
Fraud: The crypto market is susceptible to fraud, including scams, Ponzi schemes, and market manipulation.
Money Laundering: Crypto assets can be used to launder money and finance terrorist activities.
Lack of Regulation: The lack of a comprehensive regulatory framework for crypto assets creates opportunities for abuse.

By implementing strict rules for crypto firms, the FCA aims to mitigate these risks and protect consumers from financial harm.The agency also issued a notice earlier in June to U.K. consumers about 111 unregistered crypto companies in the country, demonstrating a proactive approach to safeguarding investors.

Future of Crypto Regulation in the UK

The future of crypto regulation in the UK remains uncertain.The FCA is expected to continue its stringent enforcement of AML and CTF requirements.However, there is also a growing recognition of the need to foster innovation and encourage the development of the crypto industry.Striking the right balance between protecting consumers and promoting innovation will be crucial for the UK to realize its ambition of becoming a global crypto hub.The government may need to consider adjustments to the regulatory framework to make it more accessible for legitimate crypto businesses while maintaining high standards of consumer protection and financial integrity.

Frequently Asked Questions

Why are so many crypto firms withdrawing their applications?

The primary reason is the difficulty in meeting the FCA's stringent Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) standards.

What happens if a crypto firm withdraws its application?

It must cease all crypto-related services in the UK or risk fines and legal action by the FCA.

Are crypto firms moving to other countries because of UK regulations?

Yes, some firms are considering or have moved to jurisdictions with more favorable regulatory environments, such as Switzerland, Singapore, and the UAE.

Is the FCA trying to stifle the crypto industry?

The FCA's primary goal is consumer protection and maintaining financial integrity.Its stringent regulations are designed to mitigate risks associated with crypto assets, but some argue they may be overly restrictive.

What can crypto firms do to improve their chances of getting a license?

Invest in compliance, seek expert advice, engage with the FCA, prepare thoroughly, and focus on risk management.

Conclusion: Balancing Innovation and Regulation in the UK Crypto Market

The withdrawal of 51 crypto firms from the UK licensing process is a clear indicator of the challenges facing the industry in navigating the country's regulatory landscape.The FCA's unwavering commitment to AML and CTF compliance, while commendable in its intent to protect consumers and prevent financial crime, is proving to be a significant barrier to entry for many businesses.The UK must carefully consider the long-term implications of its regulatory approach, balancing the need for robust oversight with the desire to foster innovation and attract investment in the burgeoning crypto sector.If the UK fails to strike the right balance, it risks losing out on the economic opportunities presented by crypto assets and potentially driving businesses to more welcoming jurisdictions.The key takeaways are clear: stringent regulations require significant investment in compliance, alternative jurisdictions are becoming increasingly attractive, and open communication with the FCA is crucial for those seeking to operate within the UK market.Moving forward, a collaborative approach between regulators, industry stakeholders, and policymakers will be essential to shaping a sustainable and thriving crypto ecosystem in the UK.