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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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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

FCA Extends Temporary Registration Deadline for Selected Crypto Firms

by Blockchain NewsMarch 31, 2022

The U.K.’s Financial Conduct Authority, the regulator of the financial services industry in the United Kingdom, announced Wednesday it has pushed the deadline for registration for some crypto firms in order to give them more time to get complete registration.

The regulator has allowed a few firms, including crypto wallet platform Blockchain.com, fintech company Revolut, and crypto start-up Copper, to continue trading after a temporary registration period comes to an end.

The FCA explained why some companies have given more time to register with the agency beyond an original deadline set on March 31. “The Temporary Registration Regime (TRR) will close on April 1 for all but for a small number of firms where it is strictly necessary to continue to have temporary registration. This is necessary where a firm may pursue an appeal or have particular winding-down circumstances,” the FCA stated.

Crypto Firms Could Move Abroad

Crypto companies doing business in the U.K. are required to be registered with the agency under money laundering regulations. However, the majority of the firms have not managed to get full registration. The FCA created a temporary register to allow companies to continue offering crypto trading services while they seek full registration.

The list of companies on the temporary register has significantly reduced in recent weeks because many firms such as trading app Wirex, market maker B2C2, and many others have withdrawn their applications.

To date, only 33 firms have achieved full authorization. So far, just 12 companies remain on the temporary regime, including firms such as Revolut, Copper, and Blockchain.com.

The FCA said many crypto companies do not meet the required anti-money laundering standards. Only 33 firms have made it onto the full register.

More than 100 cryptocurrency companies applied for registration with the FCA after the agency became the counter-terrorism financing and anti-money laundering authority in the U.K at the end of 2020.

The regulator introduced the temporary register in December 2020 to allow companies to do the necessary to get full authorization. With the temporary registration regime closing on Thursday, April 1, the British crypto sector faces a crisis at this moment. The uncertainty is driving some firms to set up operations overseas, which is a blow to the burgeoning industry in the United Kingdom.

Wirex has disclosed plans to provide crypto services to Brits from a Croatian subsidiary business. In contrast, B2C2, one of the crypto market-makers and OTC liquidity providers, intends to move its spot trading operations to a U.S. entity.

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Tagged : Crypto Firms / FCA / Regulation / TEMPORARY REGISTRATION DEADLINE

UK Regulator FCA Opens Recruitment for Experts to Lead Crypto Department

by Blockchain NewsMarch 16, 2022

The United Kingdom’s top market regulator, the Financial Conduct Authority (FCA), has put out an advert for an expert in digital currencies to come and head its crypto department.

According to the job description posted on its website, the market watchdog said the shortlisted candidate will head its regulatory push in the nascent cryptocurrency ecosystem.

“We are looking for a Head of Department (HoD) to build and lead a new crypto department that will lead and coordinate the FCA’s regulatory activity in this emerging market. This is a critical leadership role within a proposed new Directorate dealing with emerging business models in the SPC (Supervision, Policy, and Competition) division,” the announcement reads.

In addition, the candidate who takes this job will be tasked with the responsibility of “leading the FCA’s approach to regulatory interventions within the crypto firms in the UK, supervising innovative and complex business models of registered firms and dealing with unregistered crypto-asset businesses that may be involved in scams and frauds.”

Going by the massive role the candidate will take on, the FCA wants someone with an in-depth knowledge of the digital assets ecosystem as well as a deep knowledge of financial services. Amongst the desirable qualities include deep “knowledge and experience of policy development working with HM Treasury or similar, and applying the FCA’s supervisory tools.” While not primary, this requirement implies that the FCA will prefer someone who has likely worked in enforcement capacities in one of the country’s regulatory agencies.

The FCA has been restrategizing to bring comprehensive regulation to the nascent crypto ecosystem known for its fast growth. While the regulator has cracked down on a number of prominent trading platforms in the country, including Binance exchange, it is also known to have granted licenses to some like CEX.io in the past.

The new head of its crypto department is billed to bring more structure and clear definition to the regulators’ role in enforcing extant laws guiding startups in the crypto ecosystem.

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Tagged : Crypto / FCA / Hiring / Industry / Regulation / UK

UK FCA Shares Concerns on Binance-Paysafe Deal

by Blockchain NewsFebruary 17, 2022

The United Kingdom’s Financial Conduct Authority (FCA) has shared its concerns about the recent partnership between Binance Exchange and Paysafe, a London-based multinational online payments company.

As reported by The Telegraph, Binance has informed its once-stranded retail customers in the UK that they can now make Pounds Sterling deposits through the Paysafe infrastructure.

Recalling that the FCA proscribed all of Binance’s activities in the UK last year, a move that kickstarted the trading platform’s regulatory woes amongst a slew of other watchdogs around the world. Following the ban on Binance’s trading activities, traditional banking institutions like Barclays PLC that once supported the platform halted their services, making it impossible for the exchange’s UK customers to transact.

The partnership with Paysafe has changed the narrative, and the FCA said its “concerns about Binance remain”, according to a report by the Financial Times.

“We received a notification of this business partnership but have limited powers to object to arrangements of this kind,” the FCA spokesperson said, adding that “Paysafe is aware of our concerns and is subject to close ongoing supervision consistent with our approach for firms of its size. We cannot comment further.”

Binance has often maintained that its goal is to work with regulators worldwide to become a regulated trading platform, even in the UK. While its applications for a license from the FCA are still ongoing, the trading platform has often reiterated its readiness to work with regulators, adding that it takes its compliance obligations very seriously.

Paysafe also came on the defence of Binance, and per The Telegraph’s report, the payments startup through a spokesman said:

“We take our regulatory obligations extremely seriously and comply with the highest industry standards. We have performed thorough due diligence on Binance to ensure that they also comply with these high standards, as we do with all merchant partners.”

While the FCA’s concerns are noted, it is unclear whether any regulatory crackdown will be introduced in the near term to crack down on the partnership between both companies.

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Tagged : Binance / FCA / Paysafe / Regulation / UK

UK Regulator Cracks the Whip on Deceptive Cryptocurrency Ads

by Blockchain NewsJanuary 19, 2022

The United Kingdom government intends to bring crypto promotions into line with other financial advertisements to be transparent and fair, stopping misleading cryptocurrency ads that might trigger consumer harm like loss of money.

In a statement, the UK’s economic and finance ministry, HM Treasury, disclosed plans to put crypto advertisements under the microscope of regulation through an amendment to the Financial promotion order.

This will be instrumental in bringing crypto ads within the desired parameters, rendering consumer protection, and boosting innovation.

Therefore, promotions linked to crypto assets will be bound by rules set by the nation’s monetary watchdog, the Financial Conduct Authority (FCA).

This approach was prompted by the fact that nearly 2.3 million people in the United Kingdom are speculated to own cryptocurrencies, but some buyers may not have a clear picture of what they entail.

The new rule is aimed at preventing crypto products from being sold mistakenly. Furthermore, it will prompt a great balancing act of encouraging innovation and preventing deceptive crypto ads.

Rishi Sunak, the chancellor of the exchequer, welcomed this move and stated:

“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims.”

In June last year, the FCA slapped Binance, the world’s leading crypto exchange, with a restriction barring it from conducting advertising and financial promotions. The financial watchdog disclosed that the crypto exchange was not licensed to offer any products to UK consumers unless it regained permission, as reported by Blockchain.News.

Lately, cryptocurrency advertisements have been experiencing heavy scrutiny. For instance, the Monetary Authority of Singapore (MAS) recently banned all outdoor advertisements for all digital payment tokens (DPT) and cryptocurrency service providers to protect its citizens.

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Tagged : Advertisement / Cryptocurrency / FCA / PROMOTION / Regulation / UK

Crypto Investors Should Expect No Compensation From Government: UK Regulator

by Blockchain NewsDecember 9, 2021

Nikhil Rathi, the Chief Executive Officer of the United Kingdom Financial Conduct Authority (FCA) has taken a harsh stance against the chances of victims of digital currency scams receiving compensation from the government.

Speaking through a statement to the Treasury Committee, Rathi commented about the risks of the much-unregulated cryptocurrency sector in the country:

“When we talk about the compensation scheme, we have to draw some pretty clear lines. I would suggest anything crypto-related should not be entitled to compensations, and consumers should be clear about that when investing,”

Governments around the world are still sceptical enough concerning investments in digital currencies. This is in part related to the fact that the industry has no trusted investment safeguards and users have been subjected to a series of scams around the world. A unit of the FCA, the Financial Services Compensation Scheme (FSCS) has been living up to the task of compensating victims of rug pulls in the crypto space. This year alone, a total of 717 million pounds have been issued out in total.

According to the stance of Rathi, the UK may soon introduce a rule that will take away this privilege from crypto investors. While the regulator is not entirely against the blockchain ecosystem, support for investing in speculative assets is billed to be stumped.

“There are technologies underpinning cryptocurrencies, which, I think we would recognize, as having significant benefits and value, such as tackling financial crimes. A number of innovations, however, we have raised concerns around,” said Rathi when asked about the country’s regulatory framework.

“Some of these crypto-assets, we don’t believe have intrinsic value. They have been a part of a series of organized crimes and money laundering, and anyone who invests in them must be ready to lose all of their money.”

Different regulators are exploring their own unique avenues to protect crypto investors on their shores. As the nascent industry grows towards maturity, industry stakeholders are likely to continually advocate for progressive regulations that can bolster a good growth of all parties of interest in the ecosystem.

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Tagged : Compensation / Crypto / FCA / Fraud / Legal / UK

Kardashian’s Instagram Cryptocurrency Promotion Irks UK Financial Watchdogs

by Blockchain NewsSeptember 7, 2021

British financial watchdogs are wary of investors’ cryptocurrency investment risks introduced by well-known influencers like Kim Kardashian West.

Kim Kardashian West posted an Ethereum-related network project-related story on her Instagram story with 228 million followers, as reported by Blockchain.News on June 16.

In the story she posted, Kim Kardashian West shared a cryptocurrency called “Ethereum Max token”.

The British financial regulator pointed out on Monday that Kardashian has no need to disclose and promote this category to its fan base “a speculative digital token created a month before by unknown developers –- one of the hundreds of such tokens that fill the crypto-exchanges.”

Financial Conduct Authority (FCA) also warned investors of the risk of “speculative tokens”. Investors should be aware of the risk of losing money because FCA regulations or any compensation plan does not cover these tokens.

Randell said that:

“These tokens have only been around for a few years, so we haven’t seen what will happen over a full financial cycle. We simply don’t know when or how this story will end, but – as with any new speculation – it may not end well.”

As an influencer with 228 million followers on Instagram, Kim Kardashian West’s post is regarded as almost certainly the most prominent social media encryption promotion ever.

Although Kim Kardashian West labelled it with hashtag #AD beneath, indicating that this post was charged, Charles Randell, Chairman of the Financial Conduct Authority, stated that this might be “the largest financial promotion in history”, according to Bloomberg’s report today.

Randell stated that it is not that this particular token is a scam, stating that:

“But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all”

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Tagged : Bitcoin / Blockchain / Crypto / FCA / KIM KARDASHIAN / Legal / UK

Binance to Delist SGD Trading Pairs Amid Tightened Regulatory Scrutiny

by Blockchain NewsSeptember 6, 2021

Following Binance’s inclusion on the Investor Alert list by the Monetary Authority of Singapore (MAS), the exchange has now decided to stop all of its trading activities in the country. As highlighted in a Sunday blog post by the trading firm, trades involving the Singapore Dollar (SGD), payment options involving the country’s official tender will be halted, starting on September 10.

The exchange has also highlighted removing its App from the Singapore iOs and Google Play stores, respectively. Following the announcement, the exchange said it expects all P2P trades to be settled, as well as advertisements to be removed on or before the Friday deadline to avoid any potential trade dispute.

The announcement reads:

“Our aim is to create a sustainable ecosystem around blockchain technology and digital assets. Binance welcomes developments to our industry’s regulatory framework as they pose opportunities for the market players to collaborate with the regulators. We are committed to working constructively in policy-making that seeks to benefit every user,”

Binance clarified that it has no official Telegram or online communication channels in Singapore, a note to users that may want to be exploited based on the products winding down by the firm.

There is no doubt that Binance, which doubles as the world’s largest per trading volume, has a deep root with retail traders worldwide. Based on this, the exchange has a lot of brawls with numerous regulators around the world. Always accused of not being legally registered to carry out businesses, many regional regulators, including those from the United Kingdom, Malaysia, Germany, Canada, and Italy, amongst others, have issued warnings against Binance.

The regulator’s warnings have effectively stirred Binance to take many drastic steps to prevent being prosecuted. First, the trading firm cleared its name with the UK Financial Conduct Authority, and this move is followed directly by trading limitations in the regions where it has been flagged. Binance’s move to delist SGD trading pairs is one of the firm’s attempts to pacify regulators while fulfilling all obligations.

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Tagged : Binance / Exchanges / FCA / Mas / SINGAPORE DOLLAR

UK FCA Clears Binance, Saying Exchange Has Complied with its Demands

by Blockchain NewsAugust 26, 2021

Weeks after declaring the Binance exchange, the world’s largest trading platform, unfit from operating on its shores, the United Kingdom’s Financial Conduct Authority (FCA) has issued a notice clearing the exchange.

Published on Wednesday, August 25, as an attachment to the earlier proscription of the trading platform, the FCA said Binance has complied with all aspects of its regulatory requirements.

Binance has come under intense scrutiny in the past months as regulators worldwide clamping down on the trading platform. Amidst its woes, market authorities from Hong Kong, Italy, Japan, and Canada declared the exchange as illegally operating and carrying out services to its residents.

Following what appeared to be a coordinated effort from these regulators, Binance has had to adjust its operations by cutting off many of its product offerings. One of such products is the tokenised stock offerings that seek to offer the stocks of major publicly listed firms, including electric automaker, Tesla, software giant Microsoft, Nasdaq listed trading firm Coinbase, and Apple Inc.

Additionally, the firm had to roll back the leverage on its futures product from 125x to 20x. This was in response to the regulator’s warnings that such high leverage exposes consumers to excessive risks. Despite the regulatory strain, the response of Binance and its Chief Executive Officer, Changpeng Zhao, has been positive. The firm has often maintained that it will work with regulators to comply with local laws.

Amongst the core challenges is the fact that the exchange has no defined headquarters. To address this, Zhao noted that the firm plans to establish regional headquarters to make compliance with regulators’ demands easier. Should it be required, the CEO is also ready to step down from its role should a more qualified regulatory candidate show up.

While the FCA has cleared Binance for now, it noted in the update that the company’s subsidiary, the Binance Markets Limited (BML), is still unfit to offer services in the UK.

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Tagged : Binance / Cryptocurrency / Exchange / Exchanges / FCA / UK