The UK’s Financial Conduct Authority (FCA) has granted operational licenses to two cryptocurrency exchanges Archax, the digital security exchange, and the Winklevoss twins’ Gemini, operating in the country.
It has been reported in the Financial Conduct Authority website that both Archax and Gemini Europe Services are currently registered in the UK as crypto asset firms as of August 18 and August 19.
However, both crypto exchanges had to meet compliance requirements in terms of a risk assessment of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations which were mandatory as of January 10.
In an August 19 blog post, Archax said that the FCA’s decision had made it the “first-ever FCA regulated digital securities exchange and custodian in the UK.”
Likewise, more than a month ago on July 6, Kraken claimed to have become the first crypto exchange licensed by the FCA. Its offshoot Crypto Facilities is currently only listed as being authorized for “specific activities and product types,” but not in the same category as Archax and Gemini.
According to UK’s Financial News, Timo Schlaefer, the CEO of Kraken, said that the exchange had been granted a Multilateral Trading Facility license by the FCA. For now, Archax and Gemini are the only two firms on the FCA’s list of registered crypto-asset firms.
The new regulations enforced by the FCA on crypto-asset firms are part of the agency’s effort to comply with those from the European Union’s 5th Anti-Money Laundering Directive (5AMLD) and the Financial Action Task Force (FATF).
It has been analyzed that the FCA was officially appointed as the regulator of all cryptocurrency businesses in the UK in January.
Companies doing business in the country need to establish both monitoring and control systems to eliminate potential AML and CTF threats.
Also, the agency required all crypto firms to register before June 30, to ensure that their applications would be processed before January 10, 2021.
Thus, failure to comply by the deadline means that they will need to cease their trading activity in the UK Exchanges including CEX subsidiary Decent Finance Limited have said they are authorized to carry out “electronic money activities” while UK-based Coinfloor says it “maintains communication” with the FCA.