The Financial Conduct Authority (FCA) has issued a warning regarding diverseoptiontrades, a firm allegedly offering financial and cryptocurrency services without proper authorization in the United Kingdom. The FCA cautions consumers that engaging with unauthorized firms may result in the inability to recover funds if the firm collapses, as they may not be covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme. The authority advises verifying firm authorization through its Firm Checker and using listed contact details to prevent fraud.
According to the FCA, UK cryptoasset businesses must register under the Money Laundering Regulations if they intend to offer services falling within those rules. This requirement applies even to firms already authorized for other financial services. Registration involves submitting an application through the FCA's Connect system, paying applicable fees, and providing detailed information about the business, its activities, and key individuals. All officers, managers, and beneficial owners must pass a "fit and proper" assessment. The FCA considers past convictions, regulatory compliance, and business conduct during evaluation. Misleading or incomplete applications may be rejected.
In a recent press release by the FCA, CB Payments Limited (CBPL), part of the Coinbase Group, was fined £3.5 million for allowing 13,416 high-risk customers to access crypto trading through other Coinbase entities despite restrictions. This resulted in $226 million in transactions. The FCA cited inadequate controls as the cause of these failures, which increased money laundering risks. This enforcement action marks the first under the Electronic Money Regulations 2011.
Learn Signal reports that the Financial Conduct Authority was established on April 1, 2013, succeeding the Financial Services Authority (FSA) as part of a comprehensive reform of the UK's financial regulatory framework following the global financial crisis. Operating independently of the UK government, it is funded by fees charged to the financial services industry. Its primary objectives include protecting consumers, ensuring market integrity in the UK’s financial markets, and promoting effective competition in consumers' interests.