FCA appoints interim head of digital assets arm

FCA appoints interim head of digital assets arm
Photographer: Chris Ratcliffe/Bloomberg

The Financial Conduct Authority has appointed an interim head for its new digital assets supervision department as it tries to wean the last UK cryptocurrency firms off temporary registrations.

The City watchdog has promoted Victoria McLoughlin, previously supervision manager of crypto assets and digital markets at the regulator, to the role.

In a LinkedIn post this wek (April 19), McLoughlin said it is an “incredibly important” time for the sector.

“[It] will be a real privilege to lead delivery of our supervisory strategy and our fantastic specialist teams in a new FCA department, as we shape the future of financial services and deliver good outcomes for consumers, markets and firms in coming months,” she added.

Certain crypto asset companies have been subject to money laundering regulations since 2020.

The FCA introduced a temporary registration regime last year to allow cryptocurrency firms to continue trading while they were in the process of applying for registration.

On March 31, a deadline which was already extended from July last year, the regulator said a “small number” of firms where it was “strictly necessary” will continue to operate with temporary registrations.

The twelve-company list includes Revolut, last valued at $33bn (£25bn).

The FCA suggested firms on this list were either pursuing an appeal or may have particular winding-down circumstances.

UK crypto market attracts US attention

Also this week (April 19), US retail trading giant Robinood bought Ziglu, a UK cryptocurrency company valued at £85mn which allows retail investors to buy the digital asset.

Ziglu is one of the few crypto groups to have won approval from the FCA, meaning Robinhood now owns this permanent registration to operate in the UK market indefinitely.

The stateside firm previously pulled out of plans to launch in the UK market in July 2020, making this its second attempt to serve British investors and compete with domestic players.

But while Robinhood grew significantly off the crypto-fulled trading boom last year, shares in the company have fallen more than 30 per cent this year.

Ziglu is not the first UK crypto firm to be snapped up following the retrieval of its permanent FCA registration.

In February, Austrian exchange Bitpanda bought Trustology. Then in March, another US crypto giant called Binance - a firm the FCA raised its concerns over earlier this year - announced a partnership with exchange Eqonex, which owns an FCA-registered unit.

According to a report from Bloomberg Intelligence, crypto assets could surpass $120bn (£91bn) within the next six years and enter the mainstream, provided regulation is made clearer.

BI believes aided by clearer regulation, crypto could evolve from a niche offering to a more established investment product and eventually enter the mainstream.