Leading crypto exchanges Coinbase, Revolut, and Binance have made updates to their mobile and web applications to comply with the new regulations set forth by the United Kingdom Financial Conduct Authority (FCA).
New Rules and Changes
Coinbase and Revolut have informed their customers via email about the changes, which include the addition of “risk disclaimers” for crypto transactions. Users are also requested to update their mobile applications to ensure compliance.
“We expect businesses including social media platforms, app stores, search engines, domain name registrars and payments firms to consider the alerts we have issued and play their part in protecting UK consumers from illegal promotions.” – The FCA
Binance has taken a different approach and launched a dedicated webpage specifically for its UK customers. The exchange temporarily halted operations through its mobile app but later resumed, assuring its British users of compliance with the new regulations.
- Komainu, a digital asset custody firm backed by Nomura, CoinShares, and Ledger, obtained a license to operate in the UK on October 6. They provide custodial services to exchanges, financial institutions, and asset managers
- Some exchanges, such as ByBit and Luno, have decided to suspend operations in light of the new regulations.
Stringent Requirements
The FCA issued alerts to 146 crypto firms operating in the UK, cautioning that they are not authorized or registered by the regulatory authority. The new rules, implemented earlier this year, require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.
“The FCA has warned that failure to comply can result in criminal charges, including unlimited fines and up to two years’ imprisonment, for domestic and overseas exchanges operating in the UK.” – The FCA
Exchanges are expected to adhere to the “core rules” which include providing clear warnings to customers about the risks associated with crypto investments. Marketing materials must be fair, transparent, and not misleading. Additionally, a 24-hour cooling-off period for new customers is required.
While the FCA has extended the deadline for implementing technically challenging features until January 2024, firms are still expected to abide by the core rules from October 8.
UK’s Regulatory Efforts
The UK has been proactive in ramping up its regulatory efforts following high-profile bankruptcies in the crypto industry last year. Earlier this year, the country passed legislation to regulate cryptocurrencies and stablecoins as part of its broader financial regulatory reforms post-Brexit. The law, known as the Financial Services and Markets bill, grants regulators the authority to establish a tailored framework for the digital asset sector, promoting safe adoption of crypto in the UK.
