Coinpass has received approval from the UK regulator to become a cryptoassets firm, it confirmed yesterday. In announcing the regulatory approval, the Coinpass management team said it has always believed in adhering to regulating parts of the cryptocurrency eco-system that interface with the traditional world of finance.
Transacting between banking and crypto on a single digital layer has been Coinpass’s vision since inception. “Our registration with the UK Financial Conduct Authority is now in place and our vision is another step closer to reality,” the firm said in a statement on Wednesday.
Jeff Hancock, CEO of Coinpass, was upbeat: “We’re exceptionally pleased to be among one of the first UK based cryptocurrency Trading Exchanges for retail investors and businesses to be fully registered with the Financial Conduct Authority as a crypto-asset firm. We understand and fully support that to evolve the cryptocurrency market to be more inclusive and attractive to a larger number of users, we would require regulatory guidelines for exchanges and gateways. The UK is a financial hub for investment and fintech and it has the potential, under the FCA’s guidance, to be a world leader in cryptocurrency regulation. With this registration, I am exceptionally bullish on the future for crypto in the United Kingdom and proud of our achievement.”
Previously, UK investors and traders in the cryptocurrency market were exposed to potential money laundering, loss of funds and poor customer service by using offshore unregistered exchanges to invest in cryptocurrencies such as Bitcoin and Ethereum.
Many UK banks have opposed cryptocurrency transactions from client accounts due to the jurisdiction of certain exchanges or the source of funds when trying to liquidate cryptoassets holdings. The introduction of the mandatory registration by UK cryptoasset firms in adhering to Anti-Money Laundering guidelines, regulation and policies for offering cryptoassets is intended to ensure strength and improvement in the cryptocurrency eco-system for UK investors.
According to a recent study by Crypto Head, crypto breaches and fraud increased by 40.7% in 2020, compared with 2019. This year is set to beat last year in terms of the number of offences in the sector. In a study that analysed significant breaches and fraud involving crypto over the period 2011-2021, Crypto Head identified that the average value of a major fraud was over $46m in 2020, and on course to break $93m in 2021.
A total of $19.2bn has been stolen in crypto breaches and fraud over the past 10 years, although 2017 seems to have been a standout year, with $4.7bn stolen by hackers.
Bitcoin remains the most targeted currency, accounting for 33.3% of breaches. The United States is the most targeted country and sees the most breaches, followed by the UK.
Given the sums involved, it is not surprising to see the UK regulator requiring that cryptocurrency exchanges are more compliant with its regime than was the case previously.
