CEX.IO voluntarily ceased operations in the UK last year after new rules were introduced.
Key Contents
- CEX.IO may have met the regulatory requirements of the Financial Conduct Authority (FCA), the UK’s financial regulator.
- In October last year, the FCA introduced new financial promotion regulations that set out stricter guidelines for promoting cryptocurrencies.
- To comply with FCA regulations, CEX.IO was required to partner with Gateway 21, an FCA-authorized financial promotion agency.
CEX.IO may have met the regulatory requirements of the Financial Conduct Authority (FCA), the UK’s financial regulator, meaning the once popular centralized cryptocurrency exchange can now resume operations in the UK after previously being suspended.
In October last year, the FCA introduced new financial promotion regulations that seek stricter guidelines for promoting crypto assets. When the regulations came into effect, CEX.IO voluntarily ceased its services in the region. That said, despite the company’s strong presence in the UK market at the time, UK users accounted for approximately 69% of its customer base within the European Economic Area.
Additionally, CEX.IO had recorded a 26.9% growth in trading volume quarter-over-quarter just prior to shutting down its services, meaning that the exchange was undoubtedly a major force to be reckoned with in the UK crypto ecosystem.
Now that CEX.IO has complied with all FCA regulatory requirements, it will want to regain its original status as soon as possible.
How CEX.IO Meets FCA Guidelines
The FCA’s new rules on promoting cryptocurrencies come into effect on October 8, 2023. Cryptocurrency companies are required to include a cooling-off period and issue professional risk warnings to UK customers. Users are also required to complete an investor classification questionnaire and undergo an assessment. This is to ensure that users are well-prepared and have the basic knowledge necessary to invest in digital assets.
Basically, the FCA hopes that the new regulatory regime will bring more transparency and accountability to cryptocurrency marketing. Following this decision, the regulator has issued over 450 warnings on illegal cryptocurrency promotions before the end of 2023.
Meanwhile, in order to comply with the FCA’s rules, CEX.IO had to work with Gateway 21, an FCA-authorized financial promotion agency. The exchange is currently pursuing anti-money laundering (AML) registration with the FCA, but this collaboration has already allowed it to continue its services. However, all operations are currently provided from Lithuania.
Interestingly, CEX.IO is not the only crypto company using this ‘third party authoriser’ approach to enter the UK market. Like the exchange, Nexo also recently entered into a similar collaboration to re-enter the market.
Commenting on the recent developments, CEX.IO’s UK Managing Director Rich Evans reiterated that the exchange remains focused on regulatory compliance – even at the expense of company growth.
“We operate strictly within current regulations and hold 40 licenses and registrations worldwide. Our top priority has always been our responsibility to our users, even when it means sacrificing business growth,” he said in a statement.
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Mayowa is a crypto enthusiast and writer whose conversational nature is quite evident in his writing style. He firmly believes in the potential of digital assets and seizes every opportunity to replicate it. He is also a reader, researcher, insightful speaker, and budding entrepreneur. However, away from crypto, Mayowa’s favorite distractions include discussing football and world politics.
