FCA Warns Bitpanda Over Trustology Deal

The U.K.’s financial watchdog said it has its eyes on crypto platform Bitpanda’s plan to purchase the British company Trustology and can quash the deal if it uncovers concerns.

As Bloomberg News reported Tuesday (Feb. 22), the Financial Conduct Authority, which gave Bitpanda a license under its anti-money laundering rules last year, said it can rescind the company’s registration if it seems warranted.

“Both Bitpanda and Trustology are confident that no issues with the acquisition will arise,” Bitpanda said in a statement, per Bloomberg. “We have a good working relationship with the FCA who was informed of that transaction well in advance, and the FCA statement was in accordance with Bitpanda’s expectations.”

Bitpanda said that the deal marks the first ever purchase of an FCA-registered crypto asset firm.

The regulator has issued frequent warnings about the risks in crypto, saying in 2021 that digital token investors “should be prepared to lose all their money.”

“Crypto assets are unregulated and high-risk, which means people are very unlikely to have any protection if things go wrong,” an FCA spokesperson said last week.

Read more: UK May Boot Almost 100 Crypto Firms as Anti-Money Laundering Deadline Approaches

The U.K. has dozens of crypto firms waiting for the FCA to approve their operations in the country before a March 31 deadline, which could mean many of these providers will be forced to take their business offshore to avoid tougher, new anti-money laundering (AML) regulations.

Only a handful of firms have won approval so far, and more than half of the 153 firms that applied have either been rejected or withdrew to avoid an outright rejection that could damage their ability to get AML approval in other nations.

A representative for BitPanda said last month the deadline could backfire, weakening the U.K.’s ability to enforcement AML laws due to a loophole that still lets firms outside the country continue to sell crypto products inside its borders.