Cryptocurrency exchanges, such as Coinbase, Crypto.com, and Gemini are warning UK users that they will have to complete risk assessments and investment questionnaires to showcase their financial know-how. This missive follows the Finance Conduct Authority’s (FCA) strict new rules, which will soon come into effect.
Starting today, cryptocurrency investors will have to declare which type of investments they action and answer questions on a variety of financial services and regulations if they wish to keep on trading on these platforms. On this declaration, users must choose an investor profile, which is either high net-worth above £100,000, more than £250,000, or restricted with no more than 10% of assets going into a crypto trade.
Reportedly, the financial questionnaires are different for each exchange but essentially cover items such as different crypto products, the volatility of crypto asset values, and how financial watchdogs treat cryptocurrency as a financial product. Should a user fail to answer these questions, they will not be allowed to trade on any of these cryptocurrency exchanges.
These moves follow in the wake of the approval of the Financial Services and Markets Act, which overhauled financial services in the UK. This means virtual currency now falls under the law and will be governed the same as traditional financial products.
George Tucker Source: LinkedIn
In a CNBC email, a Coinbase spokesperson said the platform instigated the changes to comply with the FCA. It also reflects the willingness of cryptocurrency exchanges to collaborate with different regulators. George Tucker, the UK general manager of Crypto.com, stated in an email to CBNC:
We do not expect this to impact user activity in the UK and, as always, our customer service team is on hand to help with any queries.