PayPal Registers as Crypto Service Provider with UK’s Financial Conduct Authority (FCA)
Payments firm PayPal has officially registered with the UK’s Financial Conduct Authority (FCA) as a crypto service provider, allowing it to offer crypto-related services and products to British users. This registration comes after a temporary pause in crypto purchases for UK customers due to new regulatory requirements.
Fifth Money Laundering Directive (AMLD5) and Crypto Registration
In 2020, the Fifth Money Laundering Directive (AMLD5) introduced a crypto registration regime, requiring firms operating in the UK to notify the FCA and gain approval. PayPal’s registration with the FCA also grants it the ability to validate its cryptocurrency-linked promotional materials in line with marketing standards. Unregistered entities are prohibited from inviting British citizens to invest in cryptocurrencies, and all marketing materials must be approved by the FCA regardless of registration status.
Non-Compliance and Penalties
The FCA has warned that failure to comply with the new rules may result in criminal offenses punishable by an unlimited fine and/or up to two years imprisonment. These penalties apply to entities promoting cryptoassets to UK customers without adhering to the regulations.
PayPal’s Crypto Ambitions
PayPal has made significant strides in its crypto offerings this year. The company introduced a native stablecoin called PayPal USD, which runs on Ethereum and is backed by short-term treasuries, dollar deposits, and cash equivalents. They also allowed users to move purchased crypto to third-party wallets and launched a crypto-specific checkout service for merchants.
Hot Take: PayPal Expands Crypto Services in the UK
PayPal’s registration as a crypto service provider with the FCA opens up new opportunities for the company to offer crypto-related products and services to British users. This move aligns with the regulatory requirements set by the FCA to combat money laundering and ensures that marketing materials related to cryptocurrencies meet the necessary standards. As PayPal continues to expand its crypto ambitions, it solidifies its position as a major player in the crypto space.
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