Banxa's UK arm makes regulatory strides with FCA approval
The UK affiliate of Banxa, the Australia-headquartered financial infrastructure firm, has clinched a coveted spot as the first entity to grace the Financial Conduct Authority's (FCA) crypto register for the year 2024.
Authorized VASP
The company drew attention to this milestone on Tuesday, through the publication of a press release. The approval catapults BNXA UK VASP (virtual asset service provider) into the realm of authorized providers of crypto-related services to clients residing in the United Kingdom.
Notably, the UK subsidiary company's managing director, Brinda Paul, formerly held the director of compliance position at Banxa in Melbourne. She struck an optimistic note in her comments on the approval, stating:
"I am incredibly proud to have led this registration process to a successful outcome, especially considering the low approval rate of 7% for FCA registrations in 2023, - only 4 companies received their registration. Banxa believes the FCA's high standards, focusing on robust business models, corporate governance, risk management and compliance validates the Company's commitment to support cryptoasset adoption and the development of the crypto market in the UK while doing so in a compliant manner."
Banxa's stature extends to its listing on the Toronto Stock Exchange, solidifying its position as a key player in the payments infrastructure domain. The company claims to be following a mission to “build the infrastructure to extend the benefits of crypto to every merchant & consumer in the world.”
The firm includes Asian crypto service provider and investor OK Group among its list of initial investors. Other early stage investors include KuCoin and Australia’s Thorney Investment Group.
Fiat processing services
The company specializes in fiat-processing services tailored for various cryptocurrency exchanges, including heavyweights like Binance and OKX. It’s interesting to note that in the case of these two companies, neither Binance nor OKX holds FCA approval for their crypto operations, although OKX has been making a concerted effort of late towards coming into compliance.
Banxa has been accumulating money transmitter licenses in the United States. As of September, the company held 32 such licenses for various U.S. states.
A pivotal aspect of FCA registration pertains to promotional endeavors targeting UK customers. Entities aiming to disseminate promotional materials to UK-based clients must either secure registration with the FCA or obtain approval for their promotions through an authorized entity.
Responding to legislative changes, the FCA has rolled out updated guidance, extending its oversight to crypto promotions targeting UK consumers. This move aims to enhance consumer comprehension of crypto investments and associated risks, in line with the FCA's commitment to consumer protection and market integrity.
New UK marketing rules
New marketing rules have led to exchanges like Bybit withdrawing services from the UK market. Recent developments have also seen crypto platforms like KuCoin and HTX added to the FCA’s warning list of unregulated entities.
Drawing insights from industry consultations, the FCA has refined its rules and accompanying guidance, integrating feedback from stakeholders to ensure coherence and effectiveness in navigating the evolving regulatory terrain.
