- PayPal faces compliance technicalities in the U.K.
- The FSC recently announced new guidelines for crypto promotion.
- The online payment giant to halt some of its services.
PayPal has announced the move to temporarily suspend crypto sales in the U.K. following new developments in the region’s regulatory landscape. In an email sent to select customers in the U.K. market, the online payment giant has notified users that they cannot buy crypto on the platform beginning October 1.
While this was unforeseen, as PayPal successfully launched its PYUSD stablecoin on August 7, the company says the decision will allow it to comply with the recent measures enacted by the Financial Conduct Authority (FCA).
“We’re taking this measure in response to new rules enacted by the UK Financial Conduct Authority (FCA) that require crypto firms to implement additional steps before customers can purchase crypto. While we work to satisfy these new regulations, you won’t be able to buy crypto using PayPal,” read the email.
The Tightening Regulatory Environment
The announcement comes a month after the FCA reminded crypto firms operating in the country to comply with its new marketing regulations by October 8. In a letter dated July 4, the financial watchdog warned U.K. crypto operators that they would have only four routes for legally communicating crypto asset promotions to consumers in the region.
Post-October 8, any crypto-related firm that doesn’t comply with the regulations as stipulated in the letter will risk attracting an unlimited fine and/or up to two years imprisonment if found culpable. Other enforcement actions may include placing the firm on the FCA’s warning list and removing or blocking its promotions, such as websites, mobile apps, and social media accounts.
As the regulatory landscape tightens, the FCA recently revealed that it has only approved the registration of 38 firms since January 2020, against the 291 applications it has received during the said period.
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