UK Crypto Firms Struggle Complying With New Regulations By FCA
Recent reports revealed that many companies providing crypto-related products and services in the United Kingdom are struggling to find their feet under the newly launched regulations by the UK Financial Conduct Authority. Major crypto firms like Binance and Coinbase have reportedly modified their operations in alignment with the FCA’s newly implemented rules, which took effect on Oct. 8th.
For context, the Financial Conduct Authority is the primary body that oversees financial firms and markets in the United Kingdom. The regulatory body recently reviewed and updated the crypto regulations in the country. As such, many crypto platforms, including Binance, Coinbase, and Revolut, have been trying to align their businesses with the new rules.
In addition, many of these crypto firms have been sending emails to their UK users, warning them about the recent updates in their operations. For instance, on Friday, Coinbase emailed its UK customers stating that there would be some significant changes to its operations due to the laws the FCA newly implemented. However, it noted that the changes won’t stop customers from accessing essential functions of its platform, like buying, selling, and storing crypto assets.
Coinbase Reassures Its UK Customers
In the letter, Coinbase pointed out that the changes it refers to would include the integration of standard risk disclaimers on the platform as well as providing more information on the risks and rewards of many of its products and services, which the FCA enforced to help investors make well-informed decisions before investing their funds on crypto platforms.
Furthermore, Coinbase assured its UK users in the letter, stating that their accounts remain active and functional, as they can easily access their balance, crypto assets, and other essential services. Also, the firm urged the concerned users to update their Coinbase app to the latest version, and after doing so, they can continue their everyday usage.
On the other hand, Binance Exchange has reportedly created a special webpage dedicated to its UK customers. Also, the crypto firm has updated its mobile app operations to align with the FCA’s new regulations and declares it 100% regulation compliance.
Crypto Firms Struggles With FCA Rules
The new compliance developments from Binance surfaced shortly after the firm temporarily suspended its app’s services. Nonetheless, reports showed that Binance duly informed its UK customers about pausing and restarting its mobile app operations.
Meanwhile, the report showed that not all crypto giant firms in the UK decided on complying with the new regulations as some prominent crypto platforms, such as Bybit, had reportedly decided to exit the UK crypto market. In addition, prominent online payment provider PayPal has reportedly temporarily suspended its crypto asset purchases window for UK customers as it plans to modify its app to align with the newly implemented FCA regulations.
In another report, the UK primary financial regulator, FCA, recently issued a public warning to about 146 crypto companies operating within the UK, claiming that these companies are not endorsed nor backed by the FCA to work in the country.
FCA Imposed New Regulations In Crypto Firms
Furthermore, the regulator highlighted that it expects these crypto firms to contribute to protecting UK investors from illicit product advertisements.
According to the reports, the new FCA laws require crypto companies to get approval from the financial regulator in order to continue their operations in the region. Also, all marketing strategies and tools these firms wish to implement must be fully endorsed by the regulator. In addition, the newly launched regulations enforced crypto exchanges to make available to their users potential financial risks involved with each and every investment plan the platform offers its customers.
Also, the rules emphasized that the marketing tools crypto firms plan to implement must be fair, transparent, and straightforward, and a compulsory 24-hour must be provided for new customers to cool off. The regulator indicated that all crypto firms must adhere and adapt to these new rules before October 8th. It, however, gave room for an extension till January 2024. Defaulters are liable to face jail time or huge fines.
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