US exchange Uphold secures FCA approval as crypto-asset business
Uphold, the US-based platform offering cryptocurrency trading and debit cards, has received a regulatory go-ahead to launch its services in the UK.
Only 32 cryptocurrency-related companies are currently registered with Britain’s financial regulator. However, there are dozens of other crypto firms registered under the Temporary Registration Regime list. Uphold itself was listed on the FCA’s temporary crypto-asset business register.
The FCA’s approval means that the company’s UK subsidiary, Uphold Europe Limited, is compliant with AML laws in the country, as far as its activities go. Uphold was required to show that it maintains the same anti-money laundering standards as regulated banks in the country have to meet.
After restructuring the crypto product to fit Europe’s AMLD5 regulations, the US-based startup is offering its full-fledged digital money platform in the UK. Uphold’s core products include single wallet access to cryptocurrencies, fractional equities, FX, tokenized precious metals and carbon credits to customers in more than 150 countries.
UK tightens grip on crypto
Since January 2020, the City watchdog has become the anti-money laundering and counter terrorist financing supervisor of UK’s crypto asset firms. At the time, the FCA kicked off a registration scheme for crypto-asset firms with an initial deadline of one year.
However, nearly 70 crypto businesses had withdrawn earlier submitted filings for registration as the country tightens its regulation on the space. By retracting their applications, these firms had to cease operation in the UK, though more than 200 firms are still being assessed by the FCA.
Amid a backlog of licensing applications, the FCA has extended its temporary licensing regime until March 2022 for firms whose applications haven’t yet been approved to allow them to continue trading.
Meanwhile, the UK Government plans to toughen up rules on crypto advertising that could be considered misleading. The Exchequer is proposing to bring the promotion of crypto-assets into the scope of the FCA’s existing oversight, rather than creating a new framework specifically for these products.
Citing concern over investor protection, the HM Treasury said that even companies that sell regulated investments with an underlying cryptocurrency element might need FCA authorization to do so depending on their activities.
Providing the FCA with power to regulate the promotion of certain types of cryptoassets, for the first time, would be the quickest way of doing this and stamping out misleading advertising.
The City watchdog has already banned the sale of derivatives based on cryptocurrencies, in what was its first major intervention in the nascent market. The ban prohibits the sale of derivatives, including CFDs, options, and futures, based on cryptocurrency prices to retail investors.