PayPal UK Registers with FCA for Crypto Services but Faces Strict Restrictions

PayPal UK's Crypto Registration with FCA

PayPal UK has successfully registered with the Financial Conduct Authority (FCA) in the United Kingdom to offer specific crypto asset activities. This development follows the UK Treasury's recent release of regulatory proposals for crypto asset activities.

Crypto Services with Strings Attached

Effective from October 31, the registration permits PayPal UK to engage in crypto asset activities. However, there are stringent restrictions in place, as specified on the FCA's website. These limitations dictate that PayPal UK cannot onboard new customers, while existing customers are limited to holding or selling tokens, but they are prohibited from purchasing any tokens. Furthermore, the company is unable to expand its current range of services.

Prohibited Services and Ongoing Suspension

The FCA has also outlined a list of prohibited services, including facilitating peer-to-peer transactions, participating in initial coin offerings, offering staking services, and engaging in DeFi activities like crypto asset lending and borrowing. Additionally, PayPal UK is not allowed to operate automated processes for cryptoasset exchange.

In August, PayPal suspended crypto purchases in the UK due to the FCA's regulations, and this suspension is expected to continue until 2024. This development coincides with the UK Treasury's release of final proposals for the regulation of crypto asset activities, marking a significant shift in the regulatory landscape. Companies offering crypto services in the UK must now undergo registration approval and adhere to the FCA's anti-money laundering regulations.