UK Crypto Firms Update Apps and Operations to Comply with New FCA Rules

Major cryptocurrency companies such as Coinbase, Revolut, and Binance have swiftly modified their mobile and web platforms to align with the United Kingdom’s Financial Conduct Authority’s (FCA) newly implemented marketing regulations. These changes became effective on 8 October 2023.

The Financial Conduct Authority (FCA) is the UK’s primary regulatory body for financial markets and firms. Established in 2013, it aims to protect consumers, ensure market integrity, and promote competition within the financial services industry. The FCA has the authority to set business standards, regulate conduct, and enforce consumer protection laws. It oversees a wide range of financial entities, including banks, investment companies, and insurance providers.

The FCA is also responsible for licensing financial markets and exchanges. It has the power to investigate and take action against misconduct, ensuring that markets operate transparently and fairly. In addition to its domestic role, the FCA collaborates with international regulatory bodies to promote stability and integrity in global financial markets. Overall, the FCA plays a crucial role in maintaining consumer confidence and systemic stability in the UK’s financial ecosystem.

According to a report by Nivesh Rustgi for Decrypt published earlier today, Coinbase and Revolut informed their user base through email notifications over the weekend.

For example, this is the email message that Coinbase sent to its UK users last Friday (October 6):

“Due to new regulations introduced by the UK Financial Conduct Authority, starting 8 October, there will be some important changes to the Coinbase experience for users in the UK. These changes do not impact your access to any of the core services we offer in the UK: you can continue to buy, sell, and trade cryptocurrencies as usual … These changes will include the addition of prominent risk disclaimers within the Coinbase experience, and make more information available regarding certain aspects of our products and services …

“No, your account remains fully functional. These changes will have no effect on your balance, your ability to access Coinbase’s core products and services, or your access to your assets: your crypto is still your crypto! … Please ensure you have downloaded the latest version of the Coinbase app, other than that there’s no action required by you.“

Binance, on the other hand, has introduced a dedicated webpage exclusively for its UK clientele. The company also resumed its mobile app services, affirming that the app is now in compliance with the new FCA regulations. This move came after a temporary suspension of the app’s operations, as stated in an email to its UK customers.

While some companies are adapting to the new regulations, others — such as Bybit — have opted to halt their operations entirely. PayPal has also temporarily disabled cryptocurrency purchases for its UK users as it works to bring its app in line with the updated regulations.

The FCA, the financial regulatory body in the UK, issued warnings to 146 cryptocurrency firms operating in the country on the morning of 8 October 2023. The warnings emphasized that these firms are neither authorized nor registered by the FCA. A public statement from the regulatory body further clarified that it expects these companies to contribute to safeguarding UK consumers from illegal promotions.

Earlier in the year, the FCA introduced new regulations requiring cryptocurrency firms to register with the financial regulator. Additionally, these firms must have their marketing materials approved by an FCA-authorized entity. The updated rules mandate that exchanges provide transparent warnings to customers about the potential risks associated with cryptocurrency investments.

The marketing materials must be straightforward, fair, and not misleading. They should also include a 24-hour “cooling-off period” for new customers. According to Decrypt’s report, although the FCA has extended the deadline for implementing more complex features like the cooling-off period until January 2024, it expects firms to adhere to the core rules starting from 8 October 2023; also, it is worth noting that failure to comply with these regulations could result in severe penalties, including an unlimited fine and/or imprisonment for up to two years. This applies to both domestic and international exchanges operating in the UK.

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