The United Kingdom’s Regulatory Policy Committee has challenged the stance of the Financial Conduct Authority on the sale, marketing, and distribution of derivatives and exchange-traded notes (ETNs) of crypto assets to the country’s retail investors.
Prohibition by the Financial Conduct Authority The Financial Conduct Authority, U.K.’s top financial regulator, implemented the ban in question back in January 2021. The implementation restricted companies operating in the country from offering crypto investment products, including derivatives, futures, options, and ETNs, to retail investors.
The prohibition arrived into force despite resistance from most respondents to the regulator’s consultation paper. According to recent information compiled by the Regulatory Policy Committee (RPC), the FCA’s implementation needed to improve. The FCA gave the Business Impact Target assessment (BIT) rating.
What is the Regulatory Policy Committee’s view? According to the RPC, FCA’s measures led to an overall annual loss of more than £268 million. In the RPC’s opinion, the regulator failed to support its assumptions with evidence. Moreover, it had not provided enough explanation for the cost-benefit analysis used to derive the equivalent annual net direct cost to the business (EANDCB).
In March 2020, the Financial Conduct Authority (FCA) announced that all cryptocurrency exchanges must be officially registered with the FCA or stop operating in the U.K.
To become officially enlisted, exchanges needed to prove they were fully compliant with the U.K.’s anti-money laundering and anti-terrorist financing laws. More than a hundred companies applied for registration, but dozens forces to fall out, and only a few grants registered.
Why Pick an Officially Registered Exchange?
FCA registration is a lengthy, complex, and costly procedure. Companies that have gone through it have had to prove that they’re operating in complete keeping with the law and that they have systems in place to prevent misuse of funds. As a result, FCA-registered businesses are more likely to have local offices, high-grade account security, and good relationships with U.K. banks (i.e., it’s easy to get your cash in and out).
At a more fundamental level, FCA registration means that an exchange operates legally in the U.K. When it comes to your money, that’s a reasonable assurance.
(Temporary roll means companies are permitted to keep operating while they go through the registration process, but it doesn’t tell you if they will succeed. So far, dozens of companies have had to drop out of the process.)
How Can I Find Out if my Exchange is FCA Registered?
The FCA lets you check the public register to ensure that a crypto company operates legally. There are three simple steps to prevent a company’s status:
Check if the firm is on the FCA’s official list of Registered Cryptoasset Firms or firms with temporary registration.
If they aren’t on either FCA register, ask them if they can carry on business without being registered.
If they aren’t allowed to do business, the FCA suggests withdrawing your crypto assets and money, as the firm is now operating without authority.
Best FCA Registered Exchanges
As of October 2021, only four cryptocurrency exchanges have given official FCA registration.
One of the longest-running cryptocurrency businesses in the world, CoinJar opened its U.K. branch in May 2020. With a focus on clarity, ease of use, and real-world applications – their CoinJar Card Mastercard lets you pay your crypto like cash – they’re an excellent platform for both new investors and experienced traders. With over 40 leading cryptocurrencies to buy, sell, and trade, they offer one of the largest crypto selections of any officially FCA-registered exchange, all of which can make trade from within their intuitive and GBP-native mobile app.
Since 2018, compass has been offering U.K. customers a simple way to buy and sell Bitcoin, Ethereum, and several other leading cryptocurrencies using either GBP or Euro. With a no-frills interface and a focus on fast cash deposits and user security, they’re a good option for those looking for an essential way to start building and managing their portfolio.
A trustworthy app-first cryptocurrency platform, Ziglu aims to make investing in Bitcoin, Ethereum, Cardano, and a few other significant cryptos as easy as managing your money in the bank. Also offering 5% interest accounts, Euro exchange options, and a crypto-friendly debit card, Ziglu might not be for seasoned traders. Still, it’s a slick, intuitive first stop for cryptocurrency users.
One of the authentic crypto originals, Gemini, was founded in 2012 by the infamous Winklevoss twins. Now operating worldwide, Gemini’s U.K. outfit shows users a full-suite crypto experience, including a wallet, exchange, lending protocol, native stablecoin, and mobile app. Boasting 50 cryptocurrencies, a global liquidity pool, and high-level security, it’s easy to see why they’ve become one of the world’s leading crypto brands.