Luno Responds to FCA’s Looming Crypto Rules: Halts UK Investments Temporarily

Luno Responds to FCA’s Looming Crypto Rules: Halts UK Investments Temporarily

The cryptocurrency exchange platform Luno is set to
temporarily halt certain clients in the UK from making cryptocurrency
investments, effective from October 6. This suspension comes just two days
ahead of the UK Financial Conduct Authority’s (FCA) new crypto promotion rules,
aimed at ensuring consumer protection and transparency in the sector, coming
into effect.

The United Kingdom’s FCA
is planning to implement a series of rules that will significantly impact the
way cryptocurrency is marketed and promoted within the country. These rules
will reportedly categorize crypto as restricted mass market investments and
impose stringent regulations on advertising and promotions within the crypto
asset sector.

Luno Streamline
Operations

Specifically, all
crypto-related advertisements or promotional materials will be required to
include clear warnings and must refrain from offering incentives. While these
regulations were initially set to take effect on October 8, the FCA has
permitted companies operating in the crypto asset space to seek an additional
three months to align with these rules fully.

Luno, a prominent crypto
exchange platform in the UK’s market, is not alone in its response to the
impending regulations. PayPal has also announced
its plans to halt crypto purchases in
the UK until 2024 in response to FCA’s guidelines.

In a statement shared
with Coindesk, Nick Taylor, the Head of Public Policy at Luno, acknowledged the
need for change in response to the upcoming regulations. He stated, „The FCA
has implemented new rules for crypto firms. As a result, all compliant crypto
firms with UK customers are making a number of changes to their platforms in
order to comply with the new regulations.”

UK’s Crypto
Promotions and Travel Rule Regulations

Clients who will be
affected by Luno’s temporary suspension of crypto investments will still have
the option to sell their existing holdings and withdraw funds from the
platform. Taylor emphasized that Luno is adopting a phased approach to
reintroducing investment opportunities for its customers. However, Luno’s
clients will reportedly be unable to buy or trade crypto as of October 6.

With the impending
implementation of the crypto asset financial promotions regime in the UK on
October 8, 2023, the FCA recently undertook an extensive evaluation of the
regulated crypto asset firms to gauge their level of preparedness. According to
a report by Finance
Magnates, the regulator
determined that some firms had failed
to comprehend the nature of financial promotions.

Additionally, crypto
businesses in the UK are bracing themselves for a significant regulatory shift
after the FCA set the deadline for implementing the
Travel Rule. Effective
September 1, 2023, this rule mandates that crypto enterprises operating in the
UK must adhere to stringent requirements, including collecting, verifying, and
sharing crucial information related to crypto asset transfers.

This article was written by Jared Kirui at www.financemagnates.com.

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