Fears mount over Crypto firm exodus as deadline approaches

A dozen firms on the City watchdog’s temporary register face a March 31 cut-off unless they get approval or the deadline is extended.

The Bank of England is looking at options for how to regulate crypto assets. (Alamy/PA)

Fears are growing over an exodus of cryptocurrency firms from the UK as a deadline for approval from Britain’s financial watchdog fast approaches.

A dozen firms are still on a temporary register set up by the Financial Conduct Authority (FCA) allowing them to continue offering crypto services, but they face a cut-off of March 31, after which they must have permanent approval or stop operating in the UK.

Banking app Revolut is believed to be among those on the temporary register.

It is thought a growing number of firms are being forced to set up entities abroad with overseas regulators, where they can offer services to UK customers past the deadline.

While there are no formal regulations as yet for cryptocurrency in the UK, firms offering these services must meet the FCA’s standards and be given the green light to join its official register.

Only 33 firms have made it on to the permanent register so far.

The FCA has already extended the temporary regime deadline once before, from July last year, and it is thought it may choose to do so again.

Neither the FCA nor Revolut were immediately available for comment.

The Bank of England has also been looking at the regulatory approaches to crypto and last week cautioned the sector’s fast growth could pose risks to financial stability, if left unregulated.

The value of crypto assets around the world increased tenfold between early 2020 and November last year, hitting as high as 2.9 trillion dollars (£2.2 trillion).

They have since fallen back to 1.7 trillion dollars, and make up around 0.4% of financial assets around the world.