Cryptocurrency exchange Crypto.com has been approved by the UK Financial Conduct Authority (FCA) to offer cryptocurrency services and products to UK customers. The move is part of a global push into new markets by the Singapore-based company.
It described the UK market as “strategically important”, citing, among other reasons for going through the approval process, the increasing adoption of crypto and the government’s agenda to make the country a “crypto asset hub”. I’m here.
The company has also signed a pre-registration agreement with Canada’s Ontario Securities Commission, indicating its intention to offer crypto products and services in line with its regulations. This is the latest of many agreements granting licenses to operate in Canada.
While cryptocurrencies themselves are not regulated in the UK and there is no compensation for businesses or consumers who lose their digital assets, businesses wishing to sell services in this space must comply with the FCA’s anti-money laundering and terrorist financing rules. need to do it.
Founded in Hong Kong in 2016 as Monaco, Crypto.com changed its name in 2018 and is now operated by Singapore-based Foris DAX Asia.
With over 50 million users worldwide, it now operates in 90 countries after rapid expansion efforts, including obtaining regulatory approvals in the Cayman Islands, South Korea, Italy, and Cyprus just last month. increase.
Obtaining FCA approval in the UK is an important step in the process of expanding operations in the country. The process required Crypto.com to meet the same anti-money laundering standards as traditional financial services companies. The rules were updated by the FCA in April, and since then 37 of the 100 cryptocurrency-based companies that apply have been granted approval.
Crypto.com CEO Kris Marszalek said:
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Several senior UK positions were hired by Crypto.com in March, including UK General Manager and Head of Sustainability and ESG. The company is said to see the UK as a potential market after a 650% increase in adoption of cryptocurrency assets between 2018 and 2021.
Moves to tighten regulations
It battled fellow cryptocurrency exchange Binance to establish itself in various countries and gain approval from regulators to enable it to offer commercial services. So far, Binance has failed to get approval from his FCA and was effectively banned in the UK last year after concerns were raised about the platform’s potential use for money laundering.
Other crypto exchanges that have been given approval include Gemini, Kraken and eToro, while companies such as Cooper Technologies, B2C2 and Wirex have either had their UK applications rejected or have been “voluntarily removed” from the regulatory process. It was withdrawn.
The UK is working to introduce more cryptocurrency asset and service regulation, including the introduction of stablecoins under the mandate of the Financial Services and Markets Bill issued last month.
A stablecoin is a type of cryptocurrency that has value attached to the performance of traditional fiat currencies such as the US dollar. Because of this, they can typically avoid sudden fluctuations in value while maintaining the privacy and instant payments that cryptocurrencies offer.
A fiat “reserve” equivalent to the amount of stablecoin in circulation is held by the issuer as an additional level of security. However, stablecoins such as Terra and Tether have faced difficulties in recent months, raising questions about the size of their cash reserves.
Harry Edith, global co-head of fintech at law firm Linklaters, said: It is the first time that a UK licensing scheme has accommodated a specific type of crypto asset. ”
Crypto.com came under fire from the Advertising Standards Authority (ASA) earlier this year for displaying “misleading information” in its ads, and has proven so popular with other UK regulators. Is not … Two ads were banned. One shows the interest rate and the other mentions buying bitcoin with a credit card. The ASA said the advertisement failed to demonstrate the risks of investing and was “irresponsible and took advantage of consumers’ inexperience and credulity.”