In recent years, the cryptoasset landscape expanded rapidly but the regulations to govern this environment has also evolved exponentially. Advances in technology has paved the way for payments and other financial services to become very cost effective, accessible, and to simplify cross-border transactions.
Lysis Group has been, and continues to be, successful in assisting clients with complex and contentious regulatory aspects regarding crypto registration. We have significant expertise in the cryptoasset space and can provide substantial insight into this very dynamic market.
Specifically, we can provide guidance and practical assistance to ensure that your preparations for the crypto application meets the regulator’s standards to ensure a successful registration. This includes:
A detailed review of the requirements and expectations.
The management of the application process from requirements to submission; and
To review and, if necessary, redraft documents to ensure that all the regulator’s requirements and expectations are met.
Help managing the responses and inquiries from the regulator during their review of the registration application.
Following a successful registration, we can offer additional support in a regulated market. This includes the design, development, implementation, and enhancement of an effective and robust Financial Crime framework which meets the regulator’s requirements and expectations.
The regulatory landscape
Businesses that engage in cryptoasset related activities in the UK must formally register with the Financial Conduct Authority (FCA) after which these businesses can apply for an 'Authorized Payment Institutions' license. This is also applicable to businesses that are already registered or authorised by the FCA (e.g., e-money institutions, payment services and FSMA firms) and wish to carry out relevant crypto service activities.
In addition, the FCA, and other regulators, require that cryptoasset businesses operate in a regulated market, that is aligned with the Money Laundering Regulations (MLR) which include the Proceeds of Crime Act 2002. Cryptoasset businesses are also subject to fit and proper requirements under Regulation 58A of the MLR.
Due to the ever-changing nature of the cryptoasset environment, temporary registrations were granted to existing cryptoasset businesses up-and-till 31st of March 2022, specifically to businesses that were engaged in MLR cryptoasset activities, immediately before 10th January 2020, where applications were still pending determination. However, the FCA requires that all new businesses that began operating after the 10th of January 2020, obtain a full registration before they can conduct cryptoasset business in the UK.
Once a cryptoasset business has obtained full registration to operate in a country, is when it faces the real challenges i.e., to develop, maintain and operate a robust financial crime framework and demonstrate that effective controls are in place. This can be a very costly and challenging process that is often overlooked and understated. Additionally, it is likely that the regulators will intensify scrutiny to ensure that all the newly registered cryptoasset businesses are aligned with AML regulations and operating with appropriate controls to fully protect their money and their clients.
Consult the experts
To navigate through the various regulatory requirements from different countries to register your cryptoasset business, seems to be an impossible task, especially when your business interest have a global reach.
Having vast experience, Lysis Group believes that a successful registration requires careful planning and preparation so that the documentation submitted for review is fit for purpose, correctly responding to the test questions. In addition, the application must be prepared to provide the regulator with clarity on the business purpose and activities and demonstrate a good understanding of the risks and effectiveness of controls.
To date, we have assisted several cryptoasset businesses with the required registration processes in various countries including one of the first cryptoasset businesses in the UK. As crypto registration experts, we will assist you in achieving full registration in a cost-effective manner within various jurisdictions, if needed, and give you the peace of mind in knowing that your business can safely operate in a regulated market.