One of the biggest cryptocurrency platforms has received approval from the Financial Conduct Authority to offer products to customers in the UK.
Crypto.com, which facilitates transactions in cryptocurrencies and profits from charging per transaction, announced the news yesterday (August 17), after hiring several senior managers in the UK since March.
Co-founder and chief executive officer at Crypto.com, Kris Marszalek, said the news represented a “significant milestone” for the company.
“The UK represent[s] a strategically important market for us and at a time when the government is pushing forward with its agenda to make Britain a global hub for crypto asset technology and investment,” he said.
Marszalek said the company is committed to the UK market and is planning to expand its customer offering, after seeing a 650 per cent increase in adoption of crypto between 2018 and 2021, according to Bankless Times.
Crypto.com has 50mn users around the globe, and between March and November last year it processed more than $415bn of trades, according to data from digital asset specialist analytics company CryptoCompare.
A spokesperson from the FCA said they cannot comment on individual firms, but gave more detail on the work the regulator does with crypto companies.
“Successful registration depends upon a firm meeting the minimum standards we expect to prevent money laundering and terrorist financing.
“We work with crypto firms to help them understand our expectations and if they can meet the conditions for registration, we will register them.”
Financial services lawyer at Gowling WLG, Kam Dhillon, said the news was “fantastic”.
“It is significant in that [Crypto.com] has successfully managed to satisfy the high bar set by the FCA for anti money laundering registration purposes – the majority of applicants haven’t.
“The UK regulator is still (quite rightly) cautious about the crypto sector, notwithstanding its commitment to supporting innovation and competition within financial markets.”
Cryptocurrencies remain unregulated by the FCA, although the asset class was brought under money laundering regulations in 2020 which means certain cryptoasset firms must be registered with the FCA before conducting business.
Pressure has been growing on the regulator to tighten regulation of the firms, amid worsening levels of scams and fraud.
The number of cryptoasset scam reports received by the FCA more than doubled to 6,372 in 2021.
In October, the Bank of England called for new regulations around cryptocurrencies as a “matter of urgency”, warning of the risks posed by the digital asset to retail investors.
A few months earlier, FTAdviser reported that the regulator had warned consumers against holding cryptoassets after it reported a rise in ownership of the assets.
Critics have said the FCA needs more crypto experience in order to understand the asset class fully.