The Financial Conduct Authority in the United Kingdom confirmed that they’d revised their required registration fee for all cryptocurrency/blockchain businesses. This decision was made after a prolonged consultation of the UK digital asset community. Executives with the FCA confirmed this information to reporters on February 2nd, 2020. Previous to this decision, registering a crypto-based corporation cost £5,000.00. The updated policies require that new corporations pay £2,000.00 with an annual income of £250,000.00 or less. Crypto companies earning more than £250,000.00 will pay registration fees of £10,000.00. Start-up businesses without any previous income reports will pay the flat rate of £5,000.00.
October 2019 saw twenty-nine blockchain companies propose an altered version of the fee structure, which would’ve seen businesses wanting to provide cryptocurrency products, spend substantial sums of money to register these services. Brokerages were concerned with the growing power of the Financial Conduct Authority, who have become the supervisors overall blockchain-related services. However, all earnings collected through theses structured fees will be spent on counter-terror financing solutions and anti-money laundering services. This could see the FCA create substantial leaps forward with their security operations. It should be noted that most of the 20+ brokerages that opposed the FCAs original fee structure earned small profits. Increased fees would potentially see them file for bankruptcy. Luckily, the Financial Conduct Authority revised its structure and have provided brokerages with reasonable costs.
The Official Statement
The FCA provided an official statement regarding this matter. Representatives stated: “We are funded entirely by fees and levies from the businesses we regulate. We proposed a flat-rate application charge for the registration of £5,000 to recover estimated gateway costs of £400,000 from approximately 80 potential applicants known to us. There are costs to undertaking any business, and it is not unusual for companies to budget for a loss in the early years,” the regulator noted. “One submitted evidence that direct regulatory fees and levies typically represented 3%–4% of firms’ revenue, whereas the indirect costs of compliance represented 16% of revenue for firms with revenue up to £250,000.”