The large majority of cryptocurrency firms are not meeting Britain’s anti-money laundering and financing rules, said the country’s financial watchdog warning that an unprecedented number of them have withdrawn applications to register with it.

In a statement, the Financial Conduct Authority (FCA) said, it would extend the date of its temporary registrations regime from July 9 to the end of March 2022 thus allowing crypto firms to carry on their business while it conducts further checks.

The cryptocurrency sector has been plagued by lax standards on money laundering and other illicit activities.

Although standards are widely viewed to have been improved, in recent months global regulators and policymakers have voiced concerns over the illicit use of crypto.

Since January this year, cryptocurrency-related firms have had to comply with UK laws on anti-money laundering and counter-terrorist financing. “The FCA will only register firms where it is confident that processes are in place to identify and prevent this activity,” said the regulator in a statement.