Since the Financial Conduct Authority (FCA) in the UK is set to supervise digital asset businesses as part of a previous decision last month, the regulator has announced registration fees for such businesses going forward. The regulator currently estimates that some 80 firms may be subject to the registration fees, based on the information it has available and responses from market participants.
The regulator will now charge £2,000 for businesses with income from UK crypto-asset activity up to £250,000 and £10,000 for companies with income more than £250,000. The fee structure has been updated based on 29 responses against the previous proposals published last October, in which a flat £5,000 was proposed. It is not clear to us if the registration fee will be refunded if a firm cannot pass the registration process.
Since the FCA is now dictating both anti-money laundering (AML) and counter-terror financing (CTF) initiatives as part of its mandate to regulate digital asset companies, such firms will need not only pay a registration fee, but also adhere to strict financial rules regarding the movement or acceptance of funds. Nonetheless, given the FCAs experience in regulating similar asset classes, we anticipate that any new regulatory initiatives will be straightforward for digital asset companies.