The Financial Conduct Authority (FCA) added another crypto-focused firm to its famous crypto register on February 9. This time, it’s Banxa (BNXA)—the international fiat-processing payment company. Here’s what you need to know:
Banxa UK Gets Greenlight from FCA for Crypto Activities
According to the FCA’s website, Banxa UK is registered to perform certain crypto asset activities under its virtual asset service provider (VASP) licensing regime. BNXA will now be able to provide crypto-related services to its UK clients.
BNXA UK VASP joins FCA’s crypto register, offering services to UK clients. Provides fiat-processing for Binance, OKX users. Compliance reshapes industry. #Cryptocurrency #FCA @binance @okx pic.twitter.com/g4cuTDZORC
— Eve (@evelumia) February 13, 2024
As part of the registration procedure, BNXA must perform anti-money laundering (AML) checks when onboarding new customers. This process, known as know-your-customer (KYC), helps businesses carve out bad actors who want to access their platforms for illicit activities.
Additionally, the FCA register noted Brinda Paul’s email address in the contact field, indicating Paul will be serving as the head of Banxa UK. Paul served as the director of compliance for Australian-based Banxa company in a former capacity.
Banxa provides fiat-processing services for many top crypto exchanges, including Binance and OKX. The platform lets users buy and sell digital assets using regular fiat currencies like the Great Britain Pound Sterling (GBP).
While Banxa UK’s regulatory approval advances its crypto services, its service partners face major challenges with regulatory hurdles.
The Binance exchange, for instance, has been forced to stop onboarding new UK clients following the absence of an FCA license. In a blog post, Binance revealed that the decision stemmed from the UK’s new crypto ad rules.
The rule allows businesses to pre-approve their media campaigns if registered with the FCA. Binance’s media partner, Rebuildingsociety.com, still needs to get the documents from the FCA before the new rules kick in, however. This forced Binance to put its promotion plans on hold.
Although Banxa’s addition to the crypto register gives it the right to make ads, it does not have the right to approve promotions from other companies it partners with. Binance and many other clientele must follow the FCA’s regulatory line.
Registered VASPs Dipped in 2023
The FCA’s crypto register covers a list of regulated VASPs in Great Britain. Since its launch in August 2020, many crypto-facing businesses and affiliate service providers have entered the premier agency’s green records.
Recent data from the FCA has shown a worrying trend, however.
According to an infographic shared on X (formerly Twitter), the number of new VASP entities on the crypto register has dipped from a high of 12 in 2022 to merely 4 last year.
🚨🔥 According to recent data, UK Prime Minister Rishi Sunak’s crypto ambitions faced hurdles, as the FCA approved only four out of 28 firms last year. Strict advertising rules and regulatory uncertainty dissuaded major players like Binance and PayPal. pic.twitter.com/5kG9waojY4
— Amdel Trades (@AmdelTrades) February 9, 2024
Zooming into the details shows that 23 crypto entities were registered in 2021. The subsequent introduction of stringent advertising rules saw the figure drop exponentially in 2023, however.
Due to this new set of rules, companies like Binance and PayPal have been forced to limit their market penetration in the country.