The American financial tech multinational announced temporarily suspending crypto purchases within the United Kingdom (UK). The payment service firm indicated that it would scrap the service beginning October 1 till early next year.
PayPal Suspending Crypto Purchase Citing Compliance
The online money transfer firm indicated that the suspension period constitutes an opportune time for the crypto-friendly platform to adjust infrastructure and operations. The Wednesday, August 16 statement indicated that the adjustment would facilitate compliance with the local financial regulations.
The spokesperson for PayPal UK indicated that the platform would freeze the capability of account holders to purchase digital assets such as Bitcoin. The executive indicated that PayPal UK customers would continue holding their crypto assets within the platform. Such crypto holdings would not attract charges. Additionally, the customers can dispose of the currencies as they desire.
In an email dispatched to UK customers, PayPal informs customers that the temporary halt would start on October 1 till the service restoration in early 2024. PayPal added that the temporary halt is unavoidable given the need to comply with the newly issued by the UK Financial Conduct Authority (FCA).
The newly enacted regulations mandate all crypto firms to integrate additional steps and measures before new and existing clients can acquire cryptocurrencies on the crypto-friendly platforms. The announcement illustrates that PayPal is devoted to satisfying the new regulations, a reason it was freezing crypto acquisition till early 2024.
Also read:PayPal Emerging a Critical Crypto-Currency Player
The statement by Paypal aligns with the prevailing trend where electronic alternatives prioritize compliance with stringent regulatory requirements. The move coincides with when PayPal emerged as a critical financial player embracing cryptocurrencies.
A recent feat portraying PayPal’s expanding tentacles in cryptocurrencies is unveiling the PayPal USD (PYUSD) stablecoin early this month. The money transfer firm introduced a crypto hub feature within its interface. It builds on the provision of cryptocurrency services initially debuted on the platform for US clients in late 2020.
FCA Spearheading Compliance with Travel Rule and Financial Promotion Regime
News of PayPal UK freezing crypto purchases starting October surfaces as the UK government is scheduled to implement a horde of new regulations. The government indicated that it would enforce the anti-money laundering, know your customer, and Travel Rule formulated by the Financial Action Task Force starting September 1.
The UK lauded the Travel Rule directing that all FCA-approved crypto firms should comply with the provisions. The decision comes a month after the FCA directed all digital asset firms to adjust their marketing strategies to comply with the amended financial promotion regime by October 2023.
The move by PayPal is set to trigger similar decisions from the money transfer providers operating in the UK market.
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