Several crypto exchanges are taking steps to adhere to recently imposed regulations by the UK government. These regulations require crypto entities to inform users about the risks associated with trading digital assets and to promote their services responsibly.
These measures have been implemented as part of the Financial Services and Markets Act in the UK, which has expanded its scope to include firms dealing with crypto and stablecoins, subjecting them to the same regulatory standards as traditional financial services.
Adapting to UK Regulations
In the case of Coinbase’s UK users, compliance involves disclosing their investor type and completing a form confirming their understanding of the high-risk nature of crypto investments, aligning with guidelines from the UK Financial Conduct Authority (FCA). In an email to its UK users, Coinbase has made it clear that both tasks must be completed to retain access to their accounts.
@coinbaseuk so you are telling us to complete the UK FCA declarations, Task 1 & 2 but they are no where to be found on the app or logging in on a computer, what a joke! I didn’t have this problem with other exchanges. pic.twitter.com/pwLOem6Yls
— Waiting to moon (@Andy59266371) January 4, 2024
A similar approach was taken by the Seychelles-based OKX, which issued a statement on January 2 stating its intention to implement new requirements in compliance with rules set by the UK’s regulator. Starting from January 8, UK users on OKX will be required to complete two questionnaires.
The first questionnaire aims to ensure users are informed about the risks associated with crypto investments and will categorize users based on their investor profiles. The second questionnaire will inquire about users’ knowledge and experience in crypto investing to assess their understanding of certain topics and associated risks.
Users failing to complete these tasks risk losing access to their accounts.
Besides Coinbase and OKX, Crypto.com and Gemini have also expressed their commitment to meeting UK investor protection standards and ensuring that customers understand the risks involved in investing in crypto, the report said. They are actively working with local regulators to provide the necessary knowledge for users to make informed investment decisions.
Significance of January 8
The significance of January 8 lies in the fact that individuals using these platforms are obligated to complete a declaration detailing their investor profile and participate in a questionnaire focusing on financial services and regulations. This declaration requires users to identify themselves as either high-net-worth individuals or restricted investors, depending on specific criteria.
The ultimate objective of these procedures is to promote responsible trading and protect investors. As such, crypto firms are required to secure authorization or registration from the Financial Conduct Authority (FCA) to promote cryptoassets to retail customers.