UK financial regulator warns crypto firms shorty after Bitpanda-Trustology deal
The UK regulator says it has powers to cancel the registration of a crypto business if it’s found not to be compliant with set requirements.
Bitpanda announced the acquisition of DeFi custodian firm Trustology on Tuesday morning.
UK’s financial regulator, the Financial Conduct Authority (FCA), has warned crypto-asset businesses about mergers, citing the lack of a regulatory environment to assess the new owner’s compliance.
The FCA’s statement came shortly after crypto exchange Bitpand announced the acquisition of UK-registered DeFi custodian platform Trustology.
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Regulated businesses to comply with requirements
According to the financial regulator, Trustology is a regulated business under the country’s Money Laundering Regulations (MLRs) provisions.
The acquisition is thus beneficial to the acquiring company under the MLR rules. However, the said provisions do not provide for access to regulatory aspects touching on the new owners, it added in a statement.
The MLRs do not include any provisions that allow the FCA to assess the fitness and propriety of beneficial owners or changes in control before a transaction is completed,” the agency said.
In this case, the regulatory purview of the MLRs differs from other regulatory provisions, the statement added. With these in place, the watchdog has supervisory, authorisation, and enforcement powers on all businesses operating in the United Kingdom.
“The FCA can take steps to suspend or cancel the registration of a crypto asset business if it is not satisfied the firm or its beneficial owner is fit and proper,” the financial markets regulator warned.
It added that it could suspend or cancel a crypto asset firm’s registration if it’s determined that the concerned firm has failed to comply with set requirements.
Bitpanda announced it had acquired Trustology on Tuesday, with this the first-ever such merger in the UK’s crypto regulated landscape.
Bitpanda is an Australia-based cryptocurrency exchange that’s regulated in the EU. According to the exchange, the move to acquire the custodian wallet works towards the transitioning of Bitpanda Pro into a fully-fledged prime brokerage platform.