PayPal UK Registers with Financial Conduct Authority to Offer Crypto Asset Activities
PayPal UK has officially registered with the UK’s Financial Conduct Authority (FCA) to provide crypto asset activities within the country. The registration became effective on October 31, according to the FCA’s website. However, there are certain restrictions in place for PayPal UK unless otherwise granted by the FCA.
The restrictions prevent PayPal UK from acquiring new customers and limit existing customers to only holding or selling tokens. They are not allowed to purchase any tokens or expand their current range of services. Additionally, the FCA has listed various prohibited services, including peer-to-peer transactions, initial coin offerings, staking services, and participating in decentralized finance (DeFi) activities such as crypto asset lending and borrowing.
Moreover, PayPal UK is prohibited from operating any automated process that exchanges cryptoassets for money or vice versa.
Temporary Pause on Crypto Purchases
In August, PayPal temporarily halted the ability to make crypto purchases in the UK due to the FCA’s regulations. This pause will continue until 2024.
The registration of PayPal as a crypto service provider comes at a time when the UK Treasury has released its final proposals for regulating crypto asset activities. These proposals aim to bring several crypto asset activities under the regulatory perimeter for financial services for the first time.
Companies offering crypto services in the UK must obtain approval for registration and comply with the FCA’s anti-money laundering rules.
Hot Take: PayPal Expands Crypto Services in the UK Amid Regulatory Restrictions
PayPal UK’s registration with the FCA marks a significant step forward in expanding its crypto asset activities within the country. Despite facing specific restrictions imposed by the regulatory authority, such as limitations on acquiring new customers and a temporary pause on crypto purchases, PayPal UK is positioning itself as a key player in the UK’s crypto market.
The FCA’s regulations and the UK Treasury’s proposed regulatory framework demonstrate the government’s increasing focus on bringing crypto assets within the realm of financial services regulation. As more companies like PayPal enter the market, it is crucial to strike a balance between fostering innovation and ensuring consumer protection.
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