MoonPay Secures Registration From UK’s Financial Watchdog

MoonPay Secures Registration From UK’s Financial Watchdog

The cryptocurrency payment platform was approved by the FCA to operate in the United Kingdom. MoonPay also became one of the few crypto service providers to pass the financial regulator’s anti-money laundering tests.

Crypto payments infrastructure provider MoonPay is now registered under the Financial Conduct Authority (FCA) to offer its services to clients in the United Kingdom. The American company which serves over 5 million customers in more than 100 countries will operate under its London-based subsidiary MoonPay (UK) Limited.

As of December 9, the firm appears on the FCA’s registry of cryptocurrency service providers that will comply with the country’s Money Laundering, Terrorist Financing and Transfer of Funds Regulations (MLR). MoonPay now joins a list of only a handful of crypto companies that are licensed to operate in the country, which includes crypto exchange Gemini, Bitpanda and eToro, neo-bank Revolut, and crypto infrastructure provider Tullett Prebon.

FCA, which does not have the authority to regulate the sector, requires digital asset service providers (DASP) to comply with the MLR in order to operate in Britain, as these companies do not fall under the Financial Services and Markets Act 2000. However, this is all set to change with the upcoming Financial Services and Markets Bill (FSMB) which will see the regulator given new powers to oversee the crypto industry. In October, the UK’s House of Commons passed a motion to consider crypto assets as financial instruments under the FSMB.

MoonPay Secures Registration From UK’s Financial Watchdog

Currently, the FCA has instructed crypto companies to take its anti-money laundering (AML) tests for licensing their activities. This test is considered one of the toughest as only 5% of applicants are expected to pass.

“73% of applications have either been withdrawn or have failed. That is the most significant withdrawal or failure rate that we’ve had when taking on a new remit such as this (crypto),” told FCA Executive Director Sarah Pritchard to members on the House of Commons Treasury Committee.

Earlier this year, the financial watchdog noticed that several crypto service providers were violating AML rules and mostly attracted investors through promotional campaigns that instilled trust. Taking the implosion of FTX and its advertisement activities using well-known figures into consideration, the FCA published a consultation paper that included a number of amendments to the Financial Services and Markets Bill, like introducing AML tests and limiting the number of companies that will be allowed to approve marketing communications in the country.

“Historically we have seen many non-compliant promotions being approved and then communicated by unauthorised firms to retail consumers,” said FCA in its consultation paper.

The government agency is looking at whether crypto companies that want to promote their product and services should be checked for having necessary systems, controls and processes to do so, and whether they are able to maintain financial records of the promotional campaigns they intend to conduct. Apart from that, the ads will need to be approved by FCA-authorised firms. This will allow the agency to keep a close eye on these firms and the overall sector.

The Financial Services and Markets Bill which expands the FCA’s mandate to all cryptocurrencies was approved by the lower house of parliament in October. The bill will now go for a vote to the House of Lords and then to the desk of King Charles, who will sign it into law.

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