The UK and the EU are actively working to establish specific rules and regulations for the cryptocurrency industry. In the UK, the focus of these regulatory efforts is primarily centered on limiting crypto promotions.
The recent news about Revolut scaling back its cryptocurrency services for UK business clients has sparked discussions about Britain’s approach towards digital currency. This raises questions about the UK’s commitment to fostering a supportive environment for cryptocurrency.
Revolut, a prominent neobank, is allegedly set to temporarily suspend cryptocurrency purchasing on its business platform in the UK at the start of the new year. A recent email to customers indicated that the suspension only relates to the purchase of cryptocurrencies, suggesting that holding and selling activities will remain unaffected.
The decision to pause crypto purchases is in response to the need for Revolut to align with new Financial Conduct Authority (FCA) regulations related to the promotion of cryptocurrencies, which will apply from January 8, 2024. As a result, Revolut Business will cease crypto purchases on January 3. This development was further highlighted in a tweet, where Revolut Business communicated the update to its customers.
Revolut joins a list of several firms affected by the new Financial Conduct Authority (FCA) regulations in the UK, which the regulator has characterized as “tough”. Announced in June, these rules aim to align cryptocurrency advertising with the standards set for other high-risk investment products.
The new Financial Conduct Authority (FCA) regulations introduce stringent measures for cryptocurrency investments. These include mandatory warnings to customers about the risks involved in crypto investments, a prohibition on referral bonuses for attracting new customers, and a “cooling-off period” for first-time investors to delay their initial orders.
Originally scheduled for October 8, the deadline was extended to January due to anticipated complications with compliance. As early as September, the FCA observed that engagement with these new regulations was low among many crypto firms. By October 25, there had been more than 200 recorded violations of these rules. In response, the FCA issued additional guidance in November to clarify and reinforce the new regulatory framework.
In response to the stringent regulatory environment, several crypto entities have made significant changes to their operations in the UK. In September, the Bybit exchange declared its exit from the UK market.
Similarly, Marinade Finance, operating on the Solana blockchain, started blocking users from the UK . Adding to these shifts, in October, Binance suspended the onboarding of new UK customers.
This decision came after its compliance partner, Rebuildingsociety.com, encountered issues with adhering to the new regulatory standards set by the Financial Conduct Authority.