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<p>To comply with the Money Laundering Regulations (MLRs), cryptoasset firms must
demonstrate systems, controls, policies and procedures adequate to deal with the particular
risks of the cryptoasset market; any officers, managers and beneficial owners must
be fit and proper; and they are required to register with the FCA for the purposes
of money laundering supervision.</p><p>In some cases, the FCA has needed to request
additional information from firms when applications contained insufficient supporting
information and evidence. The application process for cryptoasset firms has therefore
taken longer than originally anticipated.</p><p>The government does not believe it
would be appropriate for the FCA to relax the standard against which firms are assessed.
To do so would risk undermining the UK’s high anti-money laundering and counter-terrorist
financing standards.</p><p> </p><p>To manage delays in the processing of applications
for registration, the FCA has established the Temporary Registration Regime. It allows
existing cryptoasset firms, which had applied to be registered with the FCA by 16
December 2020, to continue trading whilst their applications are assessed. This has
prevented undue disruption to established cryptoasset businesses and their customers,
whilst ensuring all firms are subject to a rigorous assessment process.</p>
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