PayPal Acquires UK Crypto License

PayPal, a notable player in the global payments realm, has secured approval from the Financial Conduct Authority (FCA) to offer cryptocurrency-related services in the United Kingdom. The authorization was disclosed on the FCA’s website, affirming that PayPal has been registered for “certain crypto asset activities” in the region since October 31, 2023. This development is part of PayPal’s broader scheme to establish a dedicated facility in the UK, aligning with the post-Brexit operational landscape.

The FCA mandates companies aspiring to delve into cryptocurrency offerings to exhibit robust measures preventing the misuse of cryptocurrencies for money laundering or terrorist financing. This regulatory scrutiny comes as the UK’s cryptocurrency sector anticipates its inaugural regulatory framework. The approval marks a significant stride for PayPal, which had temporarily suspended cryptocurrency purchases for its UK user base earlier in October. The action was a compliance measure in response to the evolving legislative milieu in the UK, as reported in August.

Following the approval, a noteworthy operational shift is set to occur. Effective November 1, UK clientele of PayPal will transition from PayPal Europe, which had hitherto serviced them, to a newly established entity within the UK. This maneuver is a direct consequence of the UK’s departure from the European Union, ensuring that PayPal continues to offer its array of products and services to the UK market seamlessly.

Although the registration permits PayPal to engage in specific crypto asset activities, it comes with a set of limitations. The FCA register underscores that PayPal’s crypto services will be confined, including a halt on on-boarding new customers and restricting existing ones to hold and sell functionalities. The firm is precluded from extending its crypto asset offerings, encompassing crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchange, and decentralized finance operations.

PayPal’s acquisition of the FCA crypto license places it as the fourth entity to attain such registration, following Interactive Brokers, Bitstamp, and Komainu. This could potentially fortify the UK’s stance in the burgeoning Bitcoin and broader cryptocurrency domain. The unfolding scenario reflects the UK’s and PayPal’s concerted efforts to adapt to the post-Brexit economic and regulatory tapestry, whilst fostering a conducive environment for cryptocurrency operations and compliance.

Image source: Shutterstock


Tagged : / / / / / / / /

Crypto Exchange Binance Withdraws Crypto License Application in Germany

The largest cryptocurrency exchange in the world, Binance, has withdrawn its application for a crypto license in Germany. The German Federal Financial Supervisory Authority (BaFin) advised the exchange to withdraw its application out of concern for its CEO, Changpeng Zhao, and the organization’s structure, according to The Wall Street Journal.

BaFin’s guidelines for a license application state that managing directors must “have the required professional qualification and be of good repute to manage an institution and must dedicate sufficient time to performing their functions.” The regulator reportedly expressed concerns that Zhao, also known as “CZ,” may not have passed a “fit and proper” test under these guidelines. Furthermore, BaFin also raised concerns that Binance’s company structure could hinder regulatory supervision.

This update comes on the heels of Binance’s disclosure on July 26, 2023, that it had retracted its application in Germany. The exchange cited its ongoing efforts to align with the European Union’s Markets in Crypto-Assets (MiCA) framework as a partial reason for this decision.

Beyond the apprehensions raised by the German regulator, Binance is also grappling with legal proceedings initiated by the United States’ Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). These proceedings are due to alleged breaches of securities laws and trading regulations. In response, Binance has sought to dismiss the CFTC lawsuit, contending that the commission has overstepped its jurisdiction.

Binance’s regulatory issues are not limited to Germany and the United States. The exchange has recently withdrawn license applications in Austria, the Netherlands, and Cyprus, and lost its partnership with European banking partner PaySafe. It also faces an investigation by French authorities accusing it of “acts of aggravated money laundering.”

Despite these challenges, Binance maintains its commitment to regulatory compliance. The exchange has stated that it still intends to apply for appropriate licensing in Germany and plans to fully comply with the European Union’s MiCA legislation, set to be implemented next year.

Image source: Shutterstock


Tagged : / / / /
Bitcoin (BTC) $ 37,730.11 0.37%
Ethereum (ETH) $ 2,051.42 1.01%
Litecoin (LTC) $ 69.43 0.86%
Bitcoin Cash (BCH) $ 221.52 0.79%