The Financial Conduct Authority (FCA), the UK’s financial regulatory body, has added another crypto-focused firm to its renowned crypto register. On February 9th, Banxa UK, a subsidiary of the international fiat-processing payment company Banxa, received the green light from the FCA to perform certain crypto asset activities under the agency’s virtual asset service provider (VASP) licensing regime.
With this registration, Banxa UK will now be able to provide crypto-related services to its clients within the UK. As part of the registration process, Banxa UK must adhere to stringent anti-money laundering (AML) and know-your-customer (KYC) procedures when onboarding new customers. This measure helps the company identify and weed out potential bad actors who might attempt to exploit its platform for illicit activities.
The FCA register also indicates that Brinda Paul, who previously served as the director of compliance for the Australian-based Banxa company, will now serve as the head of Banxa UK. Her expertise in compliance and regulatory affairs will undoubtedly be invaluable as Banxa UK navigates the complexities of the UK’s evolving crypto regulations.
Banxa provides fiat-processing services for some of the world’s largest crypto exchanges, including Binance and OKX. The platform enables users to buy and sell digital assets using traditional fiat currencies, such as the Great Britain Pound Sterling (GBP).
While Banxa UK’s regulatory approval is a significant milestone for the company, its service partners continue to face challenges in navigating the UK’s regulatory landscape. Binance, for instance, has been forced to halt onboarding new UK clients due to the absence of an FCA license. The exchange cited the UK’s new crypto ad rules as the primary reason for this decision, as businesses now require pre-approval from the FCA for media campaigns if they are registered with the agency.
Although Banxa’s addition to the crypto register grants it the right to make advertisements, it does not automatically extend this privilege to its partners. Binance and other clients must still adhere to the FCA’s regulatory guidelines.
The FCA’s crypto register, which covers a list of regulated VASPs in Great Britain, has seen a concerning trend in recent years. According to data from the FCA, the number of new VASP entities on the crypto register has declined from a high of 12 in 2022 to just 4 in 2023. This drop can be attributed to the introduction of stringent advertising rules, which have forced companies like Binance and PayPal to limit their market penetration in the UK.
As the crypto industry continues to evolve, it will be crucial for companies like Banxa UK to navigate the ever-changing regulatory landscape while maintaining a strong commitment to compliance and consumer protection.
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