With the UK’s Financial Conduct Authority (FCA) in an all-out move to ensure compliance by crypto service providers, exchanges are attempting to upgrade their operations and boost trust in the sector once again. The crypto exchange, Archax is reported to have launched a crypto-based custody service with the approval of the FCA.
Getting FCA’s Approval
The London-based crypto exchange’s latest custody offerings are just one of the other services cleared by the Financial Conduct Authority (FCA). Over the past few months, the FCA has set a high bar for digital asset service providers to meet before registering their operations in the United Kingdom.
With the new crypto custody in place, Archax revealed that all crypto assets would be separated from the exchange’s reserves. This implies that the assets under custody would not be part of any bankruptcy records if the trading firm collapses.
According to Archax’s chief marketing officer, Simon Barnby, the FTX debacle has made it mandatory to take a traditional approach to the operations within the digital asset ecosystem. Barnby added that the firm being an FCA-regulated platform, is approved to hold crypto tokens, tokenized assets, real estate, and other traditional investment tools on behalf of clients.
Institutional investors continue to explore regulated crypto tools to invest. Hence, the Archax custody product will appeal to banks and large institutional players due to a partnership between the exchange and Swiss tech solutions provider, Metaco.
Accordingly, Archax will roll out the service using IBM cloud, the most secure cyber platform for some of the world’s largest financial institutions. Barnby further noted that Archax only partners with entities having the right expertise, especially in the field of cryptographic keys.
“We intend to utilize these technologies to suit our need and not outsource them due to the FCA regulations, which mandated exchanges to be in control of all crypto-related techs they use,” Barnby added.
Flagging Down Crypto Firms
Earlier this week, the UK’s financial watchdog referred several crypto firms seeking to register with it to law enforcement for investigation. Per reports, the said companies are allegedly involved in illicit financial crimes or directly linked to organized crime groups.
According to the FCA, some of these firms have links to money laundering operations, which it forwarded to law enforcement agencies for investigation. Recently, the financial watchdog disclosed that it received 300 applications from crypto entities seeking approval to begin operations in the UK.
However, only 41 companies passed its anti-money laundering requirements, with 195 firms withdrawing their applications or being denied a license. Furthermore, the FCA added that of the 300 applicants, 29 were rejected for failing to meet the agency’s requirement for registration.
Meanwhile, the regulator has been criticized recently for its tough stance against crypto registration.
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