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UK’s FCA Introduces New Financial Promotions Regime for Cryptoasset Firms

by Blockchain NewsJuly 4, 2023

The UK’s Financial Conduct Authority (FCA) has issued a letter to cryptoasset firms outlining a new financial promotions regime. This legislation, set to be enforced from 8 October 2023, requires all entities marketing cryptoassets to UK consumers, including those based abroad, to adhere to the new regime. The scope of this regulation extends to various forms of communication such as websites, mobile apps, social media posts, and online advertisements.

The FCA has defined four legal pathways for cryptoasset promotions to UK consumers to be lawfully communicated. These include promotions conveyed by an authorised person, those made by an unauthorised person but approved by an authorised person, promotions communicated by a cryptoasset business registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), and promotions that meet the conditions of an exemption in The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

The FCA has cautioned that promotions not following these pathways will violate section 21 of the Financial Services and Markets Act 2000 (FSMA). Such violations are considered criminal offences, attracting penalties of up to 2 years imprisonment, an unlimited fine, or both. The FCA has committed to taking strong action against those promoting to UK consumers illegally.

To assist firms in understanding these new regulations, the FCA has released a Policy Statement (PS23/6) and a Guidance Consultation (GC23/1). These documents aim to clarify the standards required for financial promotions to be fair, clear, and not misleading.

The FCA has encouraged all cryptoasset firms marketing to UK consumers to be ready for the new financial promotions regime by 8 October 2023. Unregistered or unauthorised cryptoasset businesses are advised to consider which of the four legal pathways they will use for their financial promotions and how they will fulfil the requirements of that pathway and the associated FCA rules.

The FCA anticipates that the main method for cryptoasset businesses to communicate financial promotions to UK consumers will be through registration with the FCA under the MLRs. The FCA has provided information about the anti-money laundering and counter-terrorist financing (AML/CTF) regime and information for firms seeking registration under the MLRs on their website.

The FCA has also clarified that it will not review or comment on draft documents as part of their assessment of an application and that submissions of poor quality or incomplete will be rejected. The FCA has emphasised the importance of full disclosure of all relevant information and has warned that it takes any non-disclosure of information that could impact their assessment very seriously.

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UK Government Adds New Crypto Amendment In Finance Regulation Bill

by Blockchain NewsOctober 22, 2022

The UK’s Financial Services and Markets bill published an amendment paper on Friday, portraying that the UK government wants to regulate crypto and ban unauthorized service providers.

Andrew Griffith, financial services minister, in the amendments paper, stated, “to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate cryptoassets and activities relating to cryptoassets. Cryptoasset is also defined, with a power to amend the definition.”

If the bill gets passed, the amendments will give the UK government a broader regulatory framework for cryptocurrencies. Particularly, the bill will provide the Financial Conduct Authority (FCA) and HM Treasury with more oversight authority over crypto regulation.

Advancements on the bill will come to an end by November 3. However, with the confusion going on with Prime Minister Liz Truss’ who tendered her resignation on Thursday, it is said that there could eventually be some changes to the schedule.

As of now, the UK’s crypto regulatory powers are primarily bestowed to the FCA since the UK Government has provided the FCA with the ability to regulate crypto asset advertising and promotion under its existing oversight framework.

In July 2020, the UK Government worried that the lack of regulation around cryptocurrency and their associated financial products often leaves investors in the crypto industry without the same protections granted to retail investors, such as authoritative recourse and compensation.

And as a result of this, the UK government proposed that crypto asset promotions should fall under the scope of the Financial Conduct Authority’s existing oversight and should not require a whole new framework just for digital assets.

City Minister Glen said, “If adverts by unauthorized firms are misleading, or don’t fully outline the risks, then people can end up losing money. That’s why we want to put more protections in place around such financial promotions, including promoting crypto assets, while continuing to ensure people have access to a wide range of products on the market.”

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Tagged : Crypto / FCA / Regulation

Binu Paul Appointed as Head of Digital Assets in the U.K’s FCA

by Blockchain NewsOctober 15, 2022

Binu Paul has been named the new head of digital assets at the Financial Conduct Authority (FCA), the primary financial regulator in the United Kingdom.

The news was first announced after Paul made a post on Linkedin that he has officially resigned from the Financial Markets Authority (FMA) in New Zealand, as a fintech specialist lead.

Paul takes over from Victoria McLoughlin, who had been overseeing digital assets in an acting capacity since April according to a post she made via LinkedIn.

“I have had the good fortune to hold positions that allowed me to positively impact New Zealand’s financial services and technology industries, both as an employee and an entrepreneur. My accomplishments to date include founding SavvyKiwi for KiwiSavers, leading New Zealand’s top investment research firm through its successful exit, and bringing together the fintech community with Finnotec”, says Paul.

While Paul has been receiving congratulatory messages via his Linkedin post, some of his connections say he will be greatly missed in New Zealand’s fintech community.

“A big loss for New Zealand, but sounds like an amazing ground of opportunity in an exciting space,” says a commenter.

Fighting the Activities of Money Laundering

The Financial Conduct Authority (FCA) is the UK’s financial regulator that oversees the actions of 59,000 financial institutions.

The FCA, which is independent of the government, guarantees that businesses act ethically while fostering competition and openness for the benefit of customers. The FCA continues to monitor major risk factors in the financial markets and has a variety of supervisory and enforcement measures at its disposal to spot, discourage, and stop improper behaviour.

Beginning in 2020, the FCA took over as the United Kingdom’s anti-money laundering and counter-terrorism financing body.

The regulator thus demanded that businesses engaging in certain crypto asset operations across the country register with it. To this end, Revolut was offered registration to trading services in the UK, which makes it a total of 38 companies now on the list to operate crypto asset businesses in the nation.

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Tagged : BINU PAUL / FCA / Regulation

Revolut Finally Wins FCA Registration to Offer Crypto trading Services in UK

by Blockchain NewsSeptember 28, 2022

Revolut, a London-based digital banking startup, has finally won a long awaiting registration from the U.K.’s Financial Conduct Authority (FCA) to offer crypto services in the United Kingdom.

Revolut becomes the latest accredited crypto asset firm register, bringing the list of companies approved to conduct crypto asset activities in the country to 38.

An FCA spokesperson discussed the development: “We confirm that Revolut has been removed from the temporary register and has received full registration as a crypto asset firm. Revolut has agreed to a number of directions designed to ensure it has the systems and controls to meet the requirements of the money laundering regulations.”

The FCA became the U.K.’s anti-money laundering and counter-terrorism financing authority at the beginning of 2020. As a result, the regulator requested firms conducting certain cryptoasset activities nationwide to register with it. And so, more than 100 firms, including Revolut, applied for registration.

Although the registration deadline was in March this year, the FCA allowed a select number of firms to remain on the watchdog’s Temporary Registration Regime (TRR), which was introduced to enable firms to continue operating while their applications were being reviewed.

As of early April, Revolut was one of five firms on the Temporary Registration Regime, along with CEX.I0, Copper Technologies, GlobalBlock and Moneybrain. This implied that more than 60 other applications were denied registration or had withdrawn from the official register.

Efforts to Ramp Up Growth Across the World

This week, Revolut has finally received its approval, while the fate of the other four firms is still unknown. The latest move follows a series of additional regulatory achievements for Revolut around the globe as part of its efforts to launch its services to more customers.

On August 15, Revolut was granted authorization by the Cyprus Securities and Exchange Commission (CYSEC), allowing it to offer crypto services across the European Economic Area (EEA). The EEA includes the 27 nations in the European Union, including Iceland, Liechtenstein and Norway. Therefore, the U.K.’s registration license cemented the winning regulatory approval for the company’s crypto services in Europe.

Early last month, Revolut gained regulatory approval to operate in Singapore. On August 4, the firm launched its crypto services in Singapore.

With the U.K.’s FCA approval, Revolut is now fully authorized to provide crypto services in the United Kingdom. The authorization also has strengthened hopes for the firm to get a U.K. banking license that would enable it to offer its own banking products in its home country.

Revolut, which applied for a U.K. banking license in January 2021, sees getting a U.K. banking license as being a key step in its plan to become a global super app. The firm applied for 48 banking licenses across the globe, but so far, it has received 44 – still awaiting to receive some elsewhere, including in the U.K.

Revolut’s U.K. banking license may be delayed after the Financial Reporting Council (FRC) discovered flaws in its audit by U.K.’s auditing firm BDO.

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Tagged : Crypto / Exchanges / FCA / Registration / Revolut / Trading / UK

UK FCA Warns of FTX Unauthorised Provision of Financial Services to Investors

by Blockchain NewsSeptember 19, 2022

The U.K.’s Financial Conduct Authority(FCA), the regulator of the financial services industry in the United Kingdom, has issued a warning on its official website (FCA) that cryptocurrency exchange FTX may be providing financial services or products in the country without authorization.

The UK regulator, the Financial Conduct Authority, says all companies and individuals offering, promoting, or selling financial services or products in the UK must be authorised or registered by the regulator.

According to money laundering regulations, cryptocurrency companies doing business in the UK must register with the agency.

After the FCA became the UK’s counter-terrorism financing and anti-money laundering agency in late 2020, more than 100 cryptocurrency companies applied to register with the agency.

According to the FCA, cryptocurrency companies operating in the UK must have sufficient inspection and control licenses to deter money laundering and other criminal incidents such as terrorist financing.

Only 33 firms have achieved permanent registration with the FCA.

Previously, six companies — including crypto market maker B2C2 Ltd. and crypto-digital banking apps Wirex Ltd. and Trastra Ltd. — were removed from provisional registrations without adequate authorization.

UK regulators, the Financial Conduct Authority, said UK investors using FTX services will not be able to use the Financial Ombudsman service or be protected by the UK Financial Services Compensation Scheme (FSCS).

So investors need to be very wary of dealing with this unauthorized company because they are unlikely to get their money back if anything happens.

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Tagged : Bitcoin / Blockchain / FCA / FTX / Regulation

UK Financial Regulator FCA Takes Conservative Approach on Crypto Regulation

by Blockchain NewsMay 23, 2022

The United Kingdom’s Financial Conduct Authority (FCA) is not in a rush to add digital currencies to the list of industries or markets that fall within its jurisdiction.

While all agencies are working to be in tune with the Chancellor Rishi Sunak’s plans to make the UK an attractive crypto hub, the FCA believes stakeholders in the industry have a lot of adjustments to make in order to make them fit to be governed, according to the Financial Times report.

Charles Randell, the head of the FCA, cautioned the market would become over-optimistic about regulating “purely speculative crypto tokens.” Randell made a reference that crypto service offering firms seeking approval or licensing have enormous work to do, a statement that implies the agency’s backing will not be handed down on a platter.

The United Kingdom, as well as other developed economies, are torn between embracing crypto, especially for the innovative technology backing them, or banning them for how speculative and susceptible they are to manipulations or for being used for money laundering.

While every country, the UK, inclusive, wants to take a lead role in financial evolution, reconciling the work of every watchdog can be a major drawback. According to Randell, the FCA has independence regarding its approach to regulatory affairs, a direct response to calls from key crypto figures to ask the government to press the FCA into becoming more acceptable to crypto entities.

Randell is also concerned about the funding the agency will need to be able to exert its full supervision of the crypto space. This resource is currently not necessarily abundant.

Regulators worldwide are exploring avenues to tame the cryptocurrency ecosystem and make it safe for the average investor. While other countries, including Switzerland and the United Arab Emirates (UAE), have defined their paths in crypto, the UK is trying to get it right when it comes to space, a move that may take time to mature.

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Tagged : Crypto / FCA / Regulation

UK Regulator FCA Appoints Victoria McLoughlin as Interim Head of Digital Assets Division

by Blockchain NewsApril 21, 2022

The Financial Conduct Authority (FCA), a financial regulatory body in the UK, on Wednesday announced the appointment of Victoria McLoughlin as interim head of its digital assets department.

In the new role, McLoughlin is expected to be in charge of supervising digital asset companies based in the United Kingdom and supporting the development of a regulatory framework based on the government’s vision for cryptocurrency business activities in the country.

McLoughlin’s LinkedIn profile shows that she began performing the new role earlier this month. She assumed the role after serving as supervision manager of crypto assets and digital markets for the last two years. Before that, McLoughlin had been working for FCA for eleven years, where she started working for the regulator in 2009 as an associate.

McLoughlin talked about her appointment and said: “It’s an incredibly important time for the sector – and will be a real privilege to lead delivery of our supervisory strategy and our fantastic specialist teams in a new FCA Department as we shape the future of financial services & deliver good outcomes for consumers, markets and firms in coming months.”

McLoughlin has a legal background. She was trained as a solicitor at Magic Circle law firm Linklaters. During her training, she was seconded to Lehman Brothers, a global financial services firm, where she held positions in the corporate regulatory departments of the investment banking company.

Building Capabilities for Performance

In recent months, FCA has been recruiting serval new senior leaders across its supervision, competition and policy, and enforcement roles.

In March, the regulator began searching for candidates to head its digital assets department. It was looking for someone to build a team and lead and coordinate the FCA’s regulatory activities in the crypto market.

In February, FCA said that it was expecting 200 new joiners in the first quarter of this year, with 60 of these joined during that month and expected similar numbers in the coming months.

During Q4 of last year, FCA hired a number of senior leaders, including government lawyer and litigator Stephen Braviner Roman who joined the agency as a new general counsel.

The agency’s interim general counsel David Scott is staying on part-time for the transition while Miles Bake recently became FCA’s new director of governance after he joined the Bank of England.

The regulator also hired Amit Shanker as its new head of digital and intelligence. Previously, Shanker was chief data officer at JLL (Jones Lang LaSalle), a global commercial real estate services company, and head of digital transformation at HSBC.

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Tagged : FCA / Hiring / Industry Expert / UK / VICTORIA MCLOUGHLIN

Binance Appoints Former FCA Boss as Global Regulatory Head

by Blockchain NewsApril 11, 2022

Binance exchange, the world’s largest cryptocurrency trading platform, has appointed the services of Steven McWhirter as its global director of regulatory policy.

The appointment is highly significant as it marked the onboarding of yet another high-profile government official that the exchange will be onboarding as it seeks new ways to become friends with regulators worldwide.

Steven McWhirter led a successful career at the United Kingdom’s Financial Conduct Authority (FCA). In his more than 9 years of active service, he worked as the commission’s technical specialist focusing on governance, conduct, and professionalism policy. His FCA engagements also extend to the data, technology, and innovation division where he was a manager at FCA Innovate.

With these rich experiences, McWhirter will help Binance in establishing its regulatory framework. With his LinkedIn profile update to showcase his new role at Binance, the veteran policymaker appears enthusiastic to assume his new role at the exchange platform.

“I’ve been very fortunate in my time at the FCA to be involved in many national, European and global policy initiatives and debates, particularly in respect of financial services regulation of technology, where working with many great regulators, firms and global bodies gave me a ringside seat during a fascinating period in policymaking,” he said in a statement.

Binance had a rough year in 2021, as the FCA and Malaysian financial regulator amongst other regulators issued statements targeting the trading platform’s legal rights to do business on its shores. The warnings from these regulators notably stirred the trading platform to taper down its services in some regions, including China, the UK, and South Korea.

In a bid to upturn the events in its favour, Binance has been working on a plan to establish regional headquarters, a notable shift in its current model where it has no visible operating zone. The trading platform also once employed Brian Brooks, the former US OCC head to head its US subsidiary. However, Brooks’ employment was short-lived due to differences in strategic approaches.

The appointment of McWirther aligns with the exchange’s broader global goal of upturning its regulatory standing with regulators across the board.

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Tagged : Binance / FCA / Hiring / Industry Expert / STEVEN MCWHIRTER

UK Regulator FCA to Consult Crypto Industry Concerning Ecosystem & Regulation

by Blockchain NewsApril 6, 2022

The United Kingdom Financial Conduct Authority (FCA) is calling stakeholders in the digital currency ecosystem to a two-day CryptoSprint event that will be taking place on 10 and 11 May, respectively.

As detailed by the market regulator, the CryptoSprint will seek to inform regulatory policy changes based on evolving technologies bordering on cryptocurrencies.

Coming off as the very first of such avenues to bring experts in the nascent crypto ecosystem together, the FCA said it wants “applications from innovators, academics, regulators, technologists and subject matter experts who will collaborate intensively to help inform future policy decisions in a safe and inclusive way.”

The FCA is extending the invitations to the CryptoSprint to crypto specialists (including trading venues, custodians, providers, and firms), technologists, academics, regulated financial institutions, and professional advisers (including accountants, law firms, consultants, and insolvency practitioners), and consumer bodies.

Focus Problem Statements for the CryptoSprint

Just like other renowned market regulators around the world, the FCA is doing all it can to get it right concerning its regulation of cryptocurrencies and its associated startups. For the CryptoSprint event, the FCA has published three key Problem Statements (PS) it wants the participants to address.

The first PS hinges on wow should information relating to the issuance of crypto-assets be disclosed to investors. The timing, manner, and those tasked with the rights to share the information will be considered in relation to this. The second PS will seek to identify and test where regulatory obligations on centralized and decentralized crypto asset models should be placed. At the same time, the third problem statement will explore What gaps need to be addressed in the UK’s existing custody regulatory framework for custody of crypto assets to help protect UK consumers and markets.

The FCA is hoping that the participation from its proposed diverse audience will give more insights to the staff of the regulatory body in a bid to adjust its regulations to permit growth while protecting the average consumers. The announcement of the CryptoSprint event comes days after the FCA postponed the registration deadline for selected crypto platforms operating in the country.

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Tagged : CRYPTOSPRINT / FCA / Regulation

UK Regulator FCA to Convey Crypto Industry Stakeholders by Evaluating its Policymaking

by Blockchain NewsApril 6, 2022

As detailed by the market regulator, the CryptoSprint will seek to inform regulatory policy changes based on evolving technologies bordering on cryptocurrencies.

Focus Problem Statements for the CryptoSprint

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Tagged : CRYPTOSPRINT / FCA / Regulation