Luno, a cryptocurrency exchange platform, has announced that it will temporarily suspend some of its trading services for UK clients starting from October 6, 2023. The decision comes as a response to the new regulations imposed by the Financial Conduct Authority (FCA) on crypto asset firms operating in the UK. According to a blog post published by Luno on December 31, 2023, the exchange will stop offering the following services to UK clients:
- Depositing or withdrawing GBP via Faster Payments.
- Buying or selling crypto using GBP.
- Sending or receiving crypto to or from other Luno wallets.
- Creating new crypto wallets.
The FCA’s new rules for the marketing and promotion of cryptocurrencies will take effect on October 8, two days after Luno is scheduled to suspend some services. An email to a Luno client from the UK, seen by Coindesk, said the client would not be able to purchase or trade cryptocurrency as of October 6.
Luno stated that the suspension is expected to last for a few weeks, and that it will notify its customers when the services are resumed. The exchange also assured its clients that their existing GBP and crypto balances are safe and secure, and that they can still access their Luno accounts and wallets at any time.
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The reason behind the suspension is that Luno has applied for registration with the FCA as a crypto asset firm but has not yet received approval. The FCA introduced a new regime for crypto asset businesses in January 2020, requiring them to comply with anti-money laundering and counter-terrorist financing rules, and to register with the regulator by January 10, 2021. However, due to the high number of applications and the impact of the COVID-19 pandemic, the FCA has extended the deadline and has allowed firms that have already applied to continue operating under a temporary registration regime until then.
Luno is one of the many crypto firms that have applied for registration with the FCA but have not yet been approved. According to CoinDesk, other platforms that have announced similar suspensions include Wirex, Crypto.com, and Ziglu. The FCA has also warned consumers that investing in crypto assets involves high risks, and that they should be prepared to lose all their money.
The U.K. Financial Conduct Authority’s new promotion rules will treat crypto like “restricted mass market investments” and require any advertisements or promotions to contain clear warnings and ban incentives. Though the new rules were set to take effect on Oct. 8, firms can now apply for an extra three months to apply the rules. Luno is not the only one pausing parts of its U.K. business temporarily. In response to these rules, PayPal also said it would halt crypto purchases in October till 2024.
The FCA Handbook is a comprehensive and consolidated source of FCA Legal Instruments, which are made by the FCA Board and reflect the changes in the regulatory landscape. The Handbook covers various topics, such as conduct of business, prudential standards, supervision, enforcement, redress, markets and listing.
The FCA Handbook is constantly updated to reflect the developments in the financial sector, such as new products, services, risks and opportunities. The FCA also responds to changes in the UK and EU legislation, as well as international standards and best practices.
Some of the recent changes to the FCA Handbook include:
The implementation of the UK’s withdrawal from the EU and the end of the transition period on 31 December 2020. The FCA has made several amendments to the Handbook to ensure that it continues to operate effectively after Brexit, such as removing references to EU law and institutions, transferring functions from EU authorities to UK authorities, and applying temporary transitional powers to smooth the transition.
The introduction of new reporting requirements for firms to demonstrate their financial resilience during the Covid-19 pandemic. The FCA has issued a new instrument (FCA 2023/30) that requires firms to submit information on their financial resources, liquidity, capital adequacy and business continuity plans on a regular basis.
The adoption of new technical standards for electronic reporting formats for certain regulatory disclosures. The FCA has issued a new instrument (FCA 2023/31) that implements the European Single Electronic Format (ESEF) for annual financial reports of issuers admitted to trading on regulated markets. The ESEF aims to improve the accessibility, comparability and usability of financial information across Europe.
The update of the disclosure guidance and transparency rules sourcebook (DTR) to reflect changes in the UK’s listing regime. The FCA has issued a new instrument (FCA 2023/32) that amends the DTR to align with the recommendations of the UK Listing Review, which aims to enhance the attractiveness of the UK as a listing venue. The changes include reducing free float requirements, allowing dual class share structures, and simplifying prospectus requirements.
Luno, which was founded in 2013 and has over 5 million customers worldwide, said that it is committed to complying with the FCA’s regulations and standards, and that it is working closely with the regulator to complete the registration process as soon as possible. The exchange also expressed its gratitude to its UK clients for their patience and support during this transition period.