UK regulators recently took action against two major crypto companies, Coinbase and Revolut, in an effort to protect crypto users in the country. Coinbase’s subsidiary, CB Payments Limited (CBPL), was fined £3.5 million ($4.5 million) by the Financial Conduct Authority (FCA) for violating Anti-Money Laundering guidelines. Despite a prior agreement to strengthen financial crime control policies, CBPL continued to onboard and serve high-risk customers, leading to significant risks of financial crime facilitation.
On the other hand, Revolut received a restricted banking license from the UK’s Prudential Regulation Authority (PRA) after more than three years of application. This license marks the beginning of Revolut’s journey as a bank in the UK, with the company committed to offering products and services that enhance the financial lives of its users. Revolut has been a key player in the crypto industry, launching Revolut X, a standalone crypto exchange for retail customers, and reporting impressive financial figures with revenues exceeding $2 billion and profits before tax of $545 million.
The regulatory actions against Coinbase and the licensing of Revolut highlight the increasing scrutiny and regulation of the crypto industry in the UK. By holding companies accountable for compliance and granting licenses to those meeting regulatory standards, authorities aim to create a safer environment for crypto users and investors. As the crypto landscape continues to evolve, regulatory oversight plays a crucial role in ensuring the integrity and security of the market.
It is essential for crypto companies to adhere to regulatory guidelines and demonstrate a commitment to combating financial crimes such as money laundering. By implementing robust compliance measures and monitoring high-risk activities, companies can mitigate the risks of regulatory fines and reputational damage. The licensing of Revolut as a bank represents a significant milestone for the company, signaling its entry into a new phase of operation and growth in the financial sector.
Overall, the regulatory actions against Coinbase and the licensing of Revolut underscore the importance of compliance and accountability in the crypto industry. As companies navigate the evolving regulatory landscape, maintaining transparency, integrity, and adherence to regulatory standards will be key to building trust with regulators and customers alike. The UK’s regulatory actions serve as a reminder of the need for vigilance and proactive measures to address financial crime risks in the crypto sector.