Crypto companies operating in the UK face significant challenges. From denied applications to frozen accounts to excessive paperwork, cryptocurrency companies have a lot to deal with. The biggest problem is caused by the skeptical attitude of banks towards kirpto.
Bloomberg reports according to UK crypto firms are struggling to access banking services. The few banks that still work with crypto companies require a lot of documentation and information on how to verify customer transactions.
Challenges include handling rejected applications, frozen accounts, and a lot of paperwork. Even cryptocurrency companies have complained to Prime Minister Rishi Sunak’s government as the situation has worsened in recent weeks. The move runs counter to Sunak’s plans to prioritize leveraging digital financial technology and positioning the UK as a global cryptocurrency hub.
The banking response in the UK was more severe than the EU response. Tom Duff-Gordon, Vice President of International Policy at Coinbase, told Bloomberg. According to Duff-Gordon, the European Union’s efforts to create a framework for digital assets have made banks more receptive to crypto companies than other countries. The Markets in Crypto Assets Regulation (MiCA) was adopted by the European Parliament’s Committee in October, almost two years after it was first introduced in September 2020. The final vote date was moved from the October date of last year to February 2023, then this too was postponed and the new date was set. for the month of april
Nowhere is the situation this bad in the UK
So far in 2023, according to PitchBook data They’re down 94% to $55 million Venture capital investments in UK digital asset companies. In contrast, in other European countries There is an increase of 31%. Local crypto companies are turning to payment providers like BCB Payments and Stripe to keep their business going.
Similar to the US, UK authorities are tightening regulations for crypto companies. In February, the Financial Conduct Authority proposed a set of rules that Crypto company leaders could face up to two years in prisonif they do not meet certain conditions related to promotions.
Crypto companies must adhere to strict marketing terms
the in the current situation The UK Financial Conduct Authority revealed that if Parliament approved the proposal “Financial Promotion System”, Then all crypto companies operating in the country and abroad must adhere to certain requirements when promoting cryptocurrency services to UK clients.
“Marketing cryptocurrency businesses to UK consumers, including overseas businesses, must be prepared for this system.” FCA said.
According to the system proposed by the FCA, crypto companies are allowed to advertise their services Licensed by the FCA They must win, or by regulation financial promotion They must have an exemption.
According to the regulator, off-track promotion is a violation of the Financial Services and Markets Act 2000 (FSMA), and is punishable by up to two years in prison.
“We will crack down if we see companies promoting crypto assets to consumers in the UK in violation of the Financial Promotion Regulation.” FCA said.
HSBC Holdings and the Nationwide Building Society followed in March ban it Buying cryptocurrency via credit card for retail customers. It joins a growing list of banks in the country that are tightening restrictions on digital assets.
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