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Welcome to version 11.0 of Fintech UK's and CompliReg's (a leading provider of fintech consulting services to crypto asset firms) UK FCA registered Cryptoasset Firms Map.  We have also partnered with MiCAReady.com which assist digital asset firms meet the requirements under the MICA Regulation. Please get in touch with CompliReg and MiCAReady.com via their websites and give them a follow at Linkedin at https://www.linkedin.com/company/complireg and https://www.linkedin.com/company/mica-ready/

How many registered cryptoasset firms are there in the UK?

There are now 45 registered Cryptoasset firms appearing on the Financial Conduct Authority's (FCA) website as at 18th October 2024.  This represents an increase in numbers since version 10.0 was issued on 12th September 2024.

Version 11 of the Map welcomes the entry of ComplyCrypto Depository which was registered by the UK FCA on 26th September.

ComplyCrypto Depository is a partnership between Gentium UK Limited and Complyport Limited.  It aims to establish itself as a leader in the UK’s crypto-compliance market, focusing on transparency, regulatory compliance, and innovation.

ComplyCrypto Depository is a partnership between Gentium UK Limited and Complyport Limited.  It aims to establish itself as a leader in the UK’s crypto-compliance market, focusing on transparency, regulatory compliance, and innovation.

Richard Strike, Managing Director of ComplyCrypto, stated, “ComplyCrypto’s mission is to ensure that the growing cryptocurrency marketplace is safer for the economy and society as a whole. By adhering to the stringent requirements set forth by the MLRs, ComplyCrypto ensures its operations remain fully aligned with regulatory obligations related to Anti-money Laundering (AML) and Counter-Terrorist Financing (CTF) measures.”

Paul Grainger, Chairman of Complyport and Director of ComplyCrypto, expressed gratitude to the FCA for their “invaluable technical guidance and advice, their professionalism and patience throughout the registration process.” He reaffirmed the commitment of ComplyCrypto’s team to help build a safer crypto-asset marketplace.

​How many firms have been registered and deregistered by the UK FCA?

For those interested in the details, the number of registrations since 2020 until today are as follows:

• 2020 – 4 registrations
• 2021 - 25 registrations (3 firms registered in 2021 were subsequently deregistered)
• 2022 – 12 registrations
• 2023 – 4 registrations
• 2024 – 3 registrations

Total: 48 less 3 de-registrations = 45.  These 45 UK FCA registered crypto firms are shown on our Map.
​

How many unregistered crypto firms appear on the FCA register?

​There remains now 44 'unregistered cryptoasset business’ according to the latest FCA records.  There has been now change to the number or names of these 44 firms between 12 September to 18 October 2024.  However this is sharp decline since the publication of Version 9.0 Map when there were 69 such unregistered crypto firms.

As we continue to Map registered Cryptoasset firms, expect to see certain logos appear more than once as several brands will be registering several Cryptoasset firms for different purposes, such as - for example - services for (1) trading and (2) custody. An example of this is Zodia Markets (UK) Limited and its affiliate Zodia Custody Limited.

It is important to note that crypto firms registered in the UK cannot offer their services from the UK into Europe.  Those UK companies which are part of a group of companies where one of the group members holds a VASP registration in a Member State can offer service sin that Member State only.  Once the VASP achieves MiCA Regulation authorisation in their Member State or in another Member State and has the necessary passporting permissions, they will be able to offer those services across the EEA.  If you are unsure of:

• the registration requirements in the UK, please contact CompliReg.
• the authorisation requirements in the EEA, please contact MiCA Ready. 

Linkedin Posts:  https://www.linkedin.com/posts/peteroakes_cryptoasset-cryptocompliance-fintechuk-activity-7254485024501067777-bvhd

FCA Letter to Payments and Emoney Firms (7 October 2024) (from Matthew Long, Director, Payments & Digital Asset; Supervision, Policy & Competition)

FCA Letter to Banks and Building Societies (7 October 2024) (from Emad Aladhal, Director, Retail Banking Supervision, Policy & Competition).

Started as a Linkedin Post by Peter Oakes, Founder of Fintech UK. ​https://www.linkedin.com/feed/update/urn:li:activity:7249312812194230272/

Summary of the Banks and Building Society Dear CEO Letter:

The letter outlines the FCA's expectations regarding Authorised Push Payment (APP) fraud reimbursement and highlights several key points:

1. Financial Crime Prioritization: The FCA emphasizes its commitment to reducing financial crime, particularly APP fraud, which significantly harms society and consumer confidence.
2. New Reimbursement Measures: Effective October 7, 2024, the PSR requires Payment Service Providers (PSPs) using the Faster Payments System (FPS) and CHAPS to reimburse victims of APP fraud, unless the victim was grossly negligent.
3. Cost Sharing: The costs of reimbursements will be shared equally between sending and receiving firms to encourage better fraud detection and prevention.
4. Payment Delays Legislation: PSPs can delay processing payments for up to four business days if fraud is suspected, allowing for a risk-based approach to payment processing.
5. Anti-Fraud Systems: PSPs must enhance their anti-fraud systems and controls, ensuring effective governance, ongoing monitoring, and customer due diligence to prevent fraud.
6. Consumer Duty: Firms must avoid causing foreseeable harm to consumers and must provide adequate support throughout the customer lifecycle, particularly in complaint handling.
7. Information Obligations: PSPs must inform customers about dispute resolution options, including access to the Financial Ombudsman Service.
8. ‘On Us’ Payments: The reimbursement policies apply only to external payments (FPS and CHAPS), and firms must ensure that customers understand any differences in protection levels for intra-firm payments.
9. Regulatory Monitoring: The FCA and PSR will monitor compliance with reimbursement requirements and data from PSPs to ensure effective consumer protection.
10. Communication Protocol: PSPs are reminded to notify regulators of significant changes promptly and can contact the FCA or PSR as needed for inquiries.

​
Overall, the letter underscores the regulatory framework aimed at enhancing consumer protection against APP fraud and the responsibilities of PSPs in this context.

Summary of the Emoney & Payments Dear CEO Letter:

The letter outlines the FCA's expectations for Payment Service Providers (PSPs) regarding Authorised Push Payment (APP) fraud reimbursement. Key points include:

1. Financial Crime Priority: The FCA highlights the significant societal harm caused by financial crime, including fraud, and emphasizes its commitment to reducing such activities.
   
2. Reimbursement Requirements: Starting October 7, 2024, PSPs using the Faster Payments System (FPS) and CHAPS must reimburse victims of APP fraud, unless the victim was involved in the fraud or acted with gross negligence.
   
3. Cost Sharing: The reimbursement costs will be shared equally between sending and receiving firms to encourage proactive fraud prevention.
   
4. Payment Delays: New regulations allow PSPs to delay payment processing by up to four business days if fraud is suspected, enabling a more thorough assessment of potentially fraudulent transactions.
   
5. Anti-Fraud Systems: PSPs must enhance their fraud detection systems, ensure effective governance, conduct regular reviews, and maintain strong customer due diligence measures.
   
6. Capital Management: Firms are urged to manage potential liabilities from fraud reimbursements, adjusting their business models accordingly.
   
7. Consumer Duty: Under the Consumer Duty, firms must prevent foreseeable harm to customers and must provide adequate support throughout the customer lifecycle, especially regarding complaints.
   
8. Information Obligations: PSPs are required to inform customers about alternative dispute resolution options, including access to the Financial Ombudsman Service.
   
9. ‘On Us’ Payments: Reimbursement policies apply only to external payments (FPS and CHAPS), and firms must clarify any differences in protection levels for intra-firm payments.
   
10. Regulatory Monitoring: The FCA and PSR will monitor compliance with reimbursement policies and gather data to ensure effective consumer protection.
    
11. Communication Protocol: PSPs must notify regulators promptly of significant changes and can contact the FCA or PSR for assistance.
    

Overall, the letter emphasizes the importance of consumer protection and the responsibilities of PSPs in combating APP fraud.

What is the difference between the two Dear CEO Letters?

The letter issued to Payments and Emoney Firms includes:

"Capital and liquidity PSPs should recognise and manage their potential liability and the impact this may have on their capital and liquidity. We expect PSPs to review and adjust their business models and transactions to mitigate against any risk of prudential impact that may result from potential APP fraud reimbursement liabilities."

The UK FCA seems far less concerned about the introduction of the new APP Fraud regime on banks/building societies than it is for payments and emoney firms. 

Fintech UK is looking to partner with registered / regulated (or soon to be) cryptoasset firms on building out a cryptoasset section on our website.  If you are senior executive at a UK registered cryptoasset firm, please contact us here to discuss the proposed project.  Also happy to hear from senior executives at businesses which support crypto firms to support the project. See our CRYPTO page for more information

If you are are crypto firm seeking regulatory advice or director services, please contact CompliReg for assistance at the details appearing here and check out its VASP registration and other authorisation services here.

Don't forget to sign up to our Newsletter (we don't spam) by clicking here.  We use MailChimp, which means you can unsubscribe whenever you like.​

​Welcome to the version 10.0 of Fintech UK's and CompliReg's (a leading provider of fintech consulting services to crypto asset firms) UK FCA registered Cryptoasset Firms Map.

How many registered cryptoasset firms are there in the UK?
There remains 44 registered Cryptoasset firms appearing on the Financial Conduct Authority's (FCA) website as at 12th September 2024.  There has been now increase in numbers since version 9.0 was issued on 27th February 2024.

Version 10 of the Map is issued to recognised that ABEC Capital UK Limited now operates under the registration originally issued to Rubicon Digital UK Limited back 7 April 2022. On 28th August 2024, ABEX Capital UK Limited announced that it became authorised as a cryptobusiness in the UK.  Companies House records for ABEX record a change of name on 27 August 2024 from Rubicon. 

ABEX says: "This strategic move enables ABEX to expand its services beyond providing innovative solutions based on advanced proprietary execution algorithms, smart order routing, and ultra-low latency, and high frequency trading infrastructure. ABEX Capital UK Limited which will operate under the supervision of the FCA, one of the world’s most trusted financial regulators, will allow ABEX to broaden its institutional client service offerings to include agency algorithms on a matched principal basis."

Erkan Kaya, CEO and Co-Founder of ABEX, stated: “Owning an FCA registered entity is an exciting milestone for ABEX, reinforcing our commitment to delivering institutional-grade, best execution services for digital assets under regulatory supervision. This status aligns seamlessly with our strategic vision of not only servicing our institutional clients in a transparent and fully auditable fashion but doing so to standards which meet the requirements of a major regulator.”.

ABEX, is a leading provider of agency algorithms and ultra-low latency, high frequency trading infrastructure for digital assets.

The FCA says that "We have rejected submissions that didn’t include key components necessary for us to carry out an assessment, or the poor quality of key components meant the submission was invalid."

Note: The table does not include information on any appeals following FCA decisions to refuse applications.

In its Annual Report for 2023/24, the FCA stated that "Over 87% of Crypto registrations were withdrawn, rejected or refused for weak money laundering controls."  In the same report the FCA stated it the number of firms who had their authorisations cancelled, doubled from 2022/23 to 1,261.

With respect to authorisation efficiency levels, the FCA stated that 98% of authorisation cases were assessed within statutory deadlines in the reporting period, up from 89% in Q1 of 2022/23

Source: 
https://www.fca.org.uk/firms/cryptoassets-aml-ctf-regime/feedback-good-poor-applications​
https://www.fca.org.uk/publication/annual-reports/annual-report-2023-24.pdf

Revolut has secured a UK banking licence – with “restrictions” – more than three years after Britain’s most valuable fintech firm lodged its application with regulators.

The Bank of England / Prudential Regulatory Authority recorded the legal  entity Revolut NewCo UK Ltd as a bank in its 'As at 1 August 2024' update.  The UK Financial Conduct Authority register shows that Revolut NewCo UK was registered on 25 July 2024.  The Revolut entity has been assigned reference number 981170 

It is a milestone for the company, and will help pave the way for an eventual stock market listing, but it may still be some time before it can hold its customers’ deposits.

Tentative approval from the Bank of England means Revolut is in the mobilisation stage, where it will build up its banking operations.

The London-headquartered firm has waited years to get to this stage, having lodged its application for a UK banking licence in 2021.

The challenge, in part, was convincing regulators that Revolut had addressed a number of accounting issues and EU regulatory breaches, as well as reputational concerns, including an over-aggressive corporate culture. The UK’s Financial Conduct Authority also reportedly investigated the business in 2016 after a whistleblower claimed it was failing to conduct adequate money-laundering checks or properly flag suspect payments. That investigation was closed in 2017.

At the start of July this year, Nikolay Storonsky, Revolut’s CEO and co-founder, told CNBC that the company is feeling confident about securing its British bank license, after overcoming some key hurdles in its more than three-year-long journey toward gaining approval from regulators. At the time he said “Hopefully, sooner or later, we’ll get it,”.  Regulators are “still working on it,” he added, but so far haven’t raised any outstanding concerns with the fintech.

CNBC reported that one key issue the company faced was with its share structure being inconsistent with the rulebook of the Prudential Regulation Authority, which is the regulatory body for the financial services industry that sits under the Bank of England.

Revolut has multiple classes of shares and some of those share classes previously had preferential rights attached. One conditions set by the Bank of England for granting Revolut its U.K. banking license, was to collapse its six classes of shares into ordinary shares.

Revolut has since resolved this, with the company striking a deal with Japanese tech investor SoftBank to transfer its shares in the firm to a unified class, relinquishing preferential rights, according to a person familiar with the matter. News of the resolution with SoftBank was first reported by the Financial Times.

As at the date of its authorisation the following people are recorded by the UK FCA as being involved in the activities of Revolut NewCo UK:

• Thomas Charles Wallace TCW00665 Approved by regulator SMF4 Chief Risk
• Vincent Jacques Louis Alcaix VXJ00050 Approved by regulator SMF2 Chief Finance
• Benjamin John Ellis BXE00058 Approved by regulator SMF16 Compliance Oversight
• William Richard Holmes WXH00105 Approved by regulator SMF9 Chair of the Governing Body
• Ian Douglas Wilson IXW00113 Approved by regulator SMF10 Chair of the Risk Committee
• Rajan Kapoor RXK01135 Approved by regulator SMF11 Chair of the Audit Committee
• Vladyslav Yatsenko VXY01026 Approved by regulator SMF7 Group Entity Senior Manager
• Nikolay Storonsky NXS01512 Approved by regulator SMF7 Group Entity Senior Manager
• Siddhartha Jajodia SXJ00336 Approved by regulator SMF7 Group Entity Senior Manager
• Pierre Decote PXD02033 Approved by regulator SMF7 Group Entity Senior Manager
• Carlos Selonke De Souza CXS47532 Approved by regulator SMF24 Chief Operations
• Francesca Carlesi FXC01524 Approved by regulator SMF1 Chief Executive
• Chaitanya Ravilla CXR00076 Approved by regulator SMF17 Money Laundering Reporting Officer (MLRO)
• Nicholas Patrick Smith NXS00636 Approved by regulator SMF18 Other Overall Responsibility

Further reading: 
https://www.theguardian.com/business/article/2024/jul/25/revolut-receives-uk-banking-licence-after-three-year-wait

https://www.cnbc.com/2024/07/02/revolut-boss-confident-on-uk-bank-license-approval-after-record-profit.html
​

Revolut is exploring plans to monetise customer data through sharing it with advertising partners, as the fintech seeks new sources of revenue while its application for a UK banking licence remains in limbo.

“We could become a media [business] . . . a place where you have an audience and data about the audience and you monetise this,” Revolut’s head of growth.

Revolut’s push to generate a bigger slice of earnings from advertising comes as investor hype surrounding the fintech sector has waned and its application for a UK banking licence appears to have stalled. Revolut secured a $33bn valuation in a funding round led by SoftBank in 2021. However, investors Molten Ventures and Schroders have since adjusted their implied internal valuations for the start-up, with Schroders putting it as low as $18bn at the end of 2022, before revising it up to $26bn as of the end of December 2023.

It has been more than three years since the London-based fintech applied for a UK banking licence. They are typically granted within a year, UK regulatory guidance says. Securing a licence is crucial to Revolut’s ambitions to roll out lending on a wider scale in its home market and boost its profitability.

https://www.ft.com/content/21c34ad2-c267-4810-a4bf-8908a3599d72

One often-cited study* shows 40 per cent of CEO transitions end in failure within 18 months. Tenure in the post is also declining**.

Boards must then deal appropriately with the losers — either find incentives to prevent them from leaving or ensure they exit without animosity. Last year, Morgan Stanley chose to award the same bonus to three candidates even though only one took the top job. The bank also gave senior roles to the two that lost out, creating a more distributed leadership model.

* https://www.researchgate.net/publication/8008180_Ending_the_CEO_Succession_Crisis
** https://corpgov.law.harvard.edu/2023/08/04/ceo-tenure-rates-2/

Source: https://www.ft.com/content/3ec199e7-fc04-45c4-987b-2b2ac9e0ed6e

• The revenue of the fintech industry in the UK grew sharply between 2018 and 2023, despite a notable decrease in 2022. In 2023, the estimated revenue of the industry was 3.37 billion U.S. dollars, most of it generated by the digital assets segment. According to Statista Market Insights, fintech revenue is forecast to grow gradually in the coming years, reaching 6.7 billion U.S. dollars in 2028.

​

• According to Statista Market Insights, fintech revenue is forecast to grow gradually in the coming years, reaching 6.7 billion U.S. dollars in 2028.​

​
Source: https://www.statista.com/forecasts/1443821/revenue-fintech-market-for-different-segments-united-kingdom

• "Across the spectrum of listed fintech businesses globally, there’s been an impressive bounce over the past 12 months. The KBW Nasdaq Fintech index is up 31 per cent over the past year, compared with a return of 25 per cent for the broader S&P 500. This index is tracked by a UK-listed ETF from Invesco with the ticker FTEK LON, though there are other index trackers in the fintech space including one from Global X — ticker FING — and another from Xtrackers which is based on the MSCI Fintech innovation index — ticker XFSN."

​

• "One repercussion is that we may see more fintechs list on stock markets over the next year. UK-listed venture capital fund Chrysalis — one of my favourite investments at the moment — has a stake of about 1.1 per cent in Klarna, on a net asset value of $11bn, whereas the rumoured IPO price is closer to $20bn. Another key holding for the investment trust is insuretech business WeFox, which is showing signs of rapid growth."

Source: FT - read article here.  It is a very interesting article by David Stevenson, an active private investor. 

UK Fintech Sector Rebounds in Q1 2024, Attracting $1.4B in Investments

According to the latest report published by Dealroom and HSBC Innovation Banking, British startups garnered a total of $3.9 billion in funding during the first three months of 2024, with $1.4 billion directed towards the fintech sector.

"Among emerging frontier technology segments, semiconductors and quantum computing have been gaining momentum, for startups often based in science hubs like Cambridge and Oxford,” the report revealed. Challenger banks took the top spot, raising nearly $450 million in funding.
​
Among the major deals, several late-stage funding rounds have been secured for prominent companies. Monzo, a digital challenger bank, garnered £340 million in a late-stage venture capital round, while Flagstone, a cash deposit platform, raised £108 million in a growth equity round.

These substantial funding rounds demonstrate investors' continued confidence in the UK's fintech ecosystem, despite the global economic challenges.

“With companies like Monzo leading the charge, Britain’s leadership in fintech has long been key to drawing in investment from around the world,” commented Saqib Bhatti, the UK's Technology Minister.

The results of this report stand in contrast to findings from other studies covered by Finance Magnates earlier this year. For instance, a report by Tracxn in January indicated that in 2023, UK fintech startups witnessed a decline of 63%, gathering only $4.2 billion compared to $11.2 billion in 2022. This downturn was confirmed by a report in February from KPMG, which noted that global fintech funding had reached a five-year low, falling to $113.7 billion.
​
Market experts further forecast that AI will play an increasingly significant role in fintech. This was the topic of one of the recent panels during the Finance Magnates London Summit.

Most venture capital funding came from foreign investors (64%), with about one-third from domestic investors, marking a significant shift from a decade ago when local funds predominantly handled investments.

“This data reflects a busy start to the year for the UK innovation ecosystem,” commented Simon Bumfrey, the Head of Technology and Life Sciences at HSBC Innovation Banking UK. “From growth in investment in established and emerging areas like fintech and quantum computing to expansion of regional tech hubs across the length and breadth the country, there is much to celebrate.”

While London continues to lead in VC investments in the UK, gathering $2.4 billion in capital, the dynamics have shifted with a year-on-year decrease of 18%. However, substantial improvement in accumulated capital were noted in Cambridgeshire and Edinburgh, with increases of 59% and 406%, respectively.

Moreover, last month, Revolut, one of the largest British fintechs, warned that London's status as a financial technology hub is increasingly threatened due to rising external competition. Despite this, the company is still considering an IPO in London.
​​
Globally, the UK ranks third in startup investment, only behind the United States and China, while outpacing India.