December 8th 2021
LONDON — The Financial Conduct Authority is purposefully taking more time to examine applications for approval from fintech and cryptocurrency firms to weed out bad actors, chief executive Nikhil Rathi told MPs this afternoon in a committee meeting.
“We are putting more grit into the system and some of that is deliberate,” Rathi said. He made the appearance following criticism from MPs and industry players that regulatory approvals that used to take mere months a few years ago are now taking up to a year and a half to be released.
Rathi acknowledged the problem and said that around a hundred staffers are being brought in to deal with the authorization backlog. But he also defended the agency’s more “inquisitive” stance.
Pointing to crypto exchanges, which are required to register with the FCA for money laundering control, Rathi said “nearly 90 percent … have either withdrawn or we’ve refused because we see a link to money laundering and serious organized crime being propagated.”
There’s a “culture in many of those organizations that doesn’t respond” to the regulator’s demands, Rathi noted, adding that 17 cryptocurrency exchanges were approved for operation.
Treasury Committee head Mel Stride, meanwhile, demanded that Rathi also offer explanations in writing amid broader concerns that backlogs at the FCA are also due to internal conflicts between management and staff over pay, bonuses, unionization and corporate culture. In addition, media reports have noted high turnover of FCA workers, an issue that Rathi said he’s “alive” to. New offices in Leeds and Edinburgh should ease the pressure on London workers, he added.