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FCA extends crypto registration deadline for a some firms

FCA
The FCA's move gives Revolut and 11 other crypto firms time to get their affairs in order. Photo: Yuriko Nakao/Getty Images (Yuriko Nakao via Getty Images)

The Financial Conduct Authority (FCA) is extending a Thursday deadline for its approval of crypto operations, giving a dozen companies more time to get their affairs in order.

The City regulator said firms on its temporary register of cryptoasset businesses will be given additional time if they can show they require it. Firms can do this by providing more information for their application, pursuing an appeal against the FCA’s decision or to wind down their operations.

It said that applications will close for all but a "small number" of companies whose applications have not yet been fully processed.

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According to public records fintech firm Revolut is among the companies still operating under the temporary regime. The payments firm said that it did not comment on ongoing regulatory applications.

"We have been reviewing cryptoasset firms’ applications to ensure they meet the minimum standards we expect – that those who run these firms are fit and proper and that they have adequate systems to identify and prevent flows of money from crime," a FCA spokesperson told Yahoo Finance UK on Wednesday.

Read more: Will ethereum 2.0 be a paradise for crypto investors?

Despite the extension, the crypto industry warned that UK's fintech market faces a cryptocurrency exodus as more than 60 firms were rejected or withdrawing their application to the FCA.

Crypto firms Wirex and B2C2 are among those who withdrew their application, the latter said that it will shift activities to its US entity. Those that choose to relocate outside Britain will mostly be free to keep serving their UK customers from offshore.

Over a hundred companies applied for temporary permission to operate in the UK while their applications were ongoing, with only 12 firms remaining on that register.

In total, 33 firms have been approved for permanent registration with the watchdog, which allows them to continue providing crypto services from within the UK after 1 April.

"While we have registered 33 firms, we have seen too many financial crime red flags missed by the cryptoasset businesses seeking registration," the spokesperson added. "Worse, we have seen examples where firms do not have the controls necessary to raise red flags in the first place."

Read more: Bitcoin: Bank of England outlines regulatory framework for $1.7tn crypto market

It comes after the Bank of England (BoE) called on policy makers to strengthen the global framework for regulating cryptos to prevent the assets from threatening the broader stability of financial markets.

Britain's central bank Financial Policy Committee (FPC) said the role of prudential and market integrity regulators should be expanded and their coordination increased.

The crypto market, now worth $2.1tn (£1.5tn) is larger than the $1.2tn market of sub-prime mortgages that triggered the global financial crash in 2008.

Watch: What are the risks of investing in cryptocurrency?