AML regulations are not being met by cryptocurrency businesses, according to a UK minister.

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Since the FCA became the official money laundering supervisor for crypto enterprises last year, just five crypto firms have gained AML registration.

According to a top source, cryptocurrency firms in the United Kingdom have struggled to fulfill the Financial Conduct Authority’s anti-money laundering regulations.

John Glen, a member of U.K. Parliament and the economic secretary to the Treasury, pointed out major difficulties in the process of registering crypto firms under the FCA’s AML regulations in official comments on Friday.

According to the source, the FCA has only registered five crypto enterprises as of May 24 despite becoming the official AML supervisor of the crypto industry in the United Kingdom in January 2020.

“Of the firms assessed to date over 90% have withdrawn their application following FCA intervention. There are 167 crypto asset businesses with outstanding applications,” Glen noted. He added that 77 new crypto firms have applications pending full assessment.

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According to the secretary, the FCA was also unable to complete and register all applications by the earlier deadline due to a substantial number of enterprises failing to implement adequate AML control systems and recruit appropriate people. As a result, the FCA established a “Temporary Registration Regime,” enabling crypto firms to continue trading until a judgment is made on July 9.

Glen also stated that Her Majesty’s Treasury has been in regular contact with the FCA as well as industry associations, firms and consumer organizations regarding concerns over the range of financial services related to crypto. He noted that HM Treasury published a consultation on the broader regulatory framework of crypto with a focus on stablecoins in January:

“Any future regulatory regime for cryptoassets set out by the Government in light of this consultation will aim to balance the potential risk to consumers with the ambition to stimulate competition and innovation in the industry.”

This year, the FCA has increased its regulatory control of the cryptocurrency business. The authority announced plans in March to force cryptocurrency companies to submit yearly financial crimes reports. Previously, the banking authority restricted UK businesses from marketing crypto derivatives to retail clients, such as futures and exchange-traded notes.

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