- The Financial Conduct Authority (FCA) in the United Kingdom has specified details on its recently published rules for crypto-asset businesses based in the country.
- FCA proposed charging £2,000 for those businesses that have an income from asset activity up to £250,000.
- £10,000 for companies with a profit from asset activity greater than £250,000.
The Financial Conduct Authority (FCA) in the United Kingdom has specified details on its recently published rules for crypto-asset businesses based in the country. The FCA made amendments to its initial proposal for a fees structure to crypto-asset firms charging £2,000 for those businesses that have an income from asset activity up to £250,000 and £10,000 for companies with a profit from asset activity greater than £250,000.
The initial proposal made by the FCA in October 2019 involved a flat application fee of £5,000 for the registration of the business to recover an approximate of £400,000 in gateway costs from 80 potential businesses applicable to the fees in the UK that were known to the FCA. This initial proposal has now been amended due to discussions that were made with the 80 potential applicants with multiple written consultation responses claiming that the proposed £5,000 would be too hefty a fee for many start-ups and smaller crypto-asset businesses.
FCA’s Guidelines for New Crypto Business
The FCA is also taking new registrants apart from the already recognized 80. Under consideration that the newer applicants might not have had an opportunity to include the fees into their business plans, the FCA has made the current amendments to provide concessions in the fees, reducing them to £2,000 and £10,000 based on income generated from their trading businesses.
The application fee is not refundable under the case that the applicant refuses registration. If an ineligible applicant applies, maximum efforts will be made from the FCA’s part to refund the application fees. The fees will also not be refunded if the business had been using the gateway to test their eligibility.
Some suggestions that were made also included avoiding regulatory fees and regulation entirely for smaller businesses. On which the FCA responded with no commiseration by stating that they were obliged by Parliament instruction to regulate all crypto-asset businesses regardless of their operational scale.
The FCA believes that it is only fair that all crypto-asset businesses contribute a small portion of their income to the supervision and regulation of their trade. The FCA also states that smaller brokers who trade for a hobby may not have to be registered under the MLRs since it doesn’t qualify as a business. Such brokers should ideally, therefore, check whether they are obliged to be registered under the FCA.