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Guide To Cryptoasset Business Registration

Explore the essentials of registering your cryptoasset business in the UK, from FCA requirements to MLRs compliance. Learn the critical steps for operating a successful crypto exchange or wallet service with our comprehensive guide.

Guide To Cryptoasset Business Registration
Guide To Cryptoasset Business Registration
Guide To Cryptoasset Business Registration

As of 8 October 2023, cryptoasset businesses that wish to market to UK customers must be registered with the Financial Conduct Authority (FCA) under the MLRs unless an authorised person approves their financial promotions or otherwise rely on an exemption in the Financial Promotion Order.

The FCA takes robust action against firms breaching this requirement. Any circumvention, intentional misclassification of clients, misleading activities, or deviations will face thorough investigation and appropriate enforcement actions.

If you want to launch a crypto exchange, offer wallet services, or engage in other crypto-related activities in the UK, you must register your business with the FCA (AML/CTF crypto Registration). The tricky question is how to do it properly and not miss any important details.

From the reasons for registration, necessary documentation, costs, and implications of non-compliance, you’ll learn how to ensure compliance of your crypto business and uphold the standards set forth by the UK’s regulatory authority.

Cryptoasset Registration Regime

Cryptoasset business registration is a regulatory framework set out in Regulation 8 and Regulation 9 of the MLRs that engages entities, such as exchanges, wallet providers, or token issuers, to register with the regulatory authorities. This process involves providing detailed information about the entity, its operations, and key personnel.

The key elements of the registration include adherence to specific compliance standards, such as anti-money laundering (AML) and know-your-customer (KYC) requirements, to prevent illicit activities and enhance financial integrity. Operational details, such as the nature of cryptoasset services, transaction processes, and risk management procedures, are other essential components of the registration process.

The cryptoasset registration regime is a necessity for businesses to be able to legally operate, access essential banking facilities, and reach a wider user base.

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10 Elements of a Successful Registration

  • Business plan: The applicant's business plan should include information about its business model, roles, and responsibilities of service providers, brokers, introducers, sub-custodians, and outsourcing partners. Ideally, the plan should also specify sources of liquidity and flow-of-funds charts.
  • Description of products and services: An application should include information about the applicant’s products, token offerings, classification, relevant whitepapers, different services, and other functionalities.
  • Risk assessment and management: Cryptoasset businesses should acknowledge the risks of their business model, market volatility, cybersecurity threats, regulatory compliance challenges, and other relevant considerations. Business-Wide Risk Assessment (BWRA) is a suggested measure to understand potential vulnerabilities better and develop effective risk mitigation strategies.
  • Policies, systems & controls: The applicants are expected to have policies, systems, and controls in place. For example, controls related to reliance on external ecosystems for liquidity, evaluations of the extent of interoperability of the applicant's products, risk mitigation strategies pertaining to market-makers, native token trading, white-labeling services, unusual B2B models, sub-custodian services, or dependence on peer-to-peer platforms.
  • Outsourcing: An applicant must inform the FCA about its outsourcing arrangements within and outside the UK. Third-party service providers must comply with the requirements of the MLRs.
  • Transaction monitoring and blockchain analysis coverage: Continuous monitoring is a key to compliance. Crypto businesses need tools that holistically monitor all transactions, their source or destination, and configure your alerts.
  • Description of a group structure: A successful application clearly demonstrates management structure. It includes details of key individuals, their responsibilities, expertise, and qualifications, accompanied by CVs providing further insights into their professional backgrounds.
  • Suspicious Activity Reporting: A Suspicious Activity Reporting (SAR) policy for crypto businesses is a crucial component of their compliance framework. The employees should be trained to identify and file suspicious activities.
  • Sanction-specific controls: The applicants must keep abreast of sanction list updates and promptly implement internal procedures.
  • Website: The applicant's website should contain the company's products and services, regulatory compliance, security measures, and terms of use. As a primary communication channel, it should reflect any changes in the business's operations, compliance protocols, or operations.


A cryptoasset is a cryptographically secured digital representation of value or contractual rights utilizing distributed ledger technology. Categorized into exchange tokens, security tokens, and utility tokens, these assets can be electronically transferred, stored, or traded.

The FCA adopts a risk-based approach with regard to supervising cryptoasset businesses. It makes sure you have adequate and relevant policies, procedural documents, and internal controls in place. In cases of misconduct, the FCA employs a similar approach to taking enforcement action.

Registration is mandatory for firms engaged in cryptoasset activities falling within the scope of the Money Laundering Regulations (MLRs) and if these activities are conducted "by way of business" within the UK, according to the MLRs.

Regulatory authorities have the power to issue fines, revoke registration, undertake legal proceedings, or take other disciplinary measures against businesses that violate or fail to comply with established regulations and mechanisms. The severity of the violations generally defines the extent of these measures.

The application fee amounts to £10,000. On top of that, businesses are required to pay a periodic based on the annual revenues of the cryptoassets business once they are registered with the FCA.

The duration of the registration process for a cryptoasset business is generally three months. By then, the regulatory authority should come to a decision regarding the application. However, every business case might follow a different scenario depending on the completeness and accuracy of the submitted documentation, as well as the complexity of the business model.

Yes, the FCA applies different criteria for reviewing startups compared to established businesses. The latter face more stringent requirements because they have a longer operational track record, capital, and scope of services. Regulatory authorities take into consideration the transparency of a company's history, risk management systems, and operational stability.

No, an applicant cannot provide in-scope cryptoassets services until the registration process is complete and official approval is granted. Unauthorized involvement in these services could lead to serious legal consequences and regulatory measures.

Yes, appointing a Money Laundering Reporting Officer ("MLRO") is a part of the cryptoasset business' regulatory compliance obligations. The nominated officer should have relevant knowledge, experience, training, and access to resources to monitor transactions, assess internal reports, carry out risk assessments, and coordinate with law enforcement agencies in case of suspicious activities.

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