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The U.K.'s financial regulator said a full 87% of crypto companies that applied for licensing under the country's money laundering rules failed to win approval in its most recent fiscal year.

Only four of the 35 applications received by the Financial Conduct Authority (FCA) managed to qualify in the 12 months ended March 31, it said in its annual report. Among those successfully registering were Binance's payments partner, BNXA , a PayPal U.K. unit and Komainu, a crypto custody joint venture of Nomura. The rest were either refused a license or rejected for lacking key components needed for assessment.

"Over 87% of crypto registrations were rejected, withdrawn or refused," the FCA said. "We help firms applying for authorisation by communicating our expectations and issuing guidance on good and poor practice. This is helping firms understand what is required – 44 crypto firms now have money laundering registration."

The FCA has been overseeing the crypto sector and registering firms under its anti-money laundering rules since 2020 . The regulator is waiting for legislation that will enable it to actually authorize companies to operate in the country . It may have to wait longer. The new Labour government elected in July paused crypto plans .

Since January 2020, the FCA has received 359 applications from crypto companies and only 44 companies are registered.

Some of the companies that didn’t end up receiving full FCA approval say the registration process was made difficult by long wait times, a lack of feedback and – as some described – unfair treatment by the regulator, CoinDesk reported last year. The lengthy waits have prompted some crypto companies to leave the country to seek registration elsewhere and serve U.K. customers from abroad.

UK Regulator FCA Has Issued Over 1K Warnings to Crypto Firms Since October