- Luno plans to suspend certain crypto trading services in the U.K. in response to forthcoming regulations by the U.K.’s FCA, which will restrict crypto advertisements and ban referral programs.
- The FCA’s new regulations treat crypto as “restricted mass market investments.”
- Luno’s affected customers can still sell and withdraw funds. In response to these regulations, PayPal will also suspend crypto purchases in the U.K. until 2024.
Cryptocurrency exchange platform Luno will temporarily suspend cryptocurrency investments for certain U.K. consumers beginning October 8. This ban comes just two days before the U.K. Financial Conduct Authority’s (FCA) new crypto marketing guidelines, which aim to protect consumers and increase transparency in the sector.
The FCA of the United Kingdom intends to introduce a set of rules that will substantially impact how crypto is marketed and promoted in the country. These laws would purportedly classify crypto as restricted mass market assets and impose tight limitations on crypto asset advertising and promotion.
Luno Simplifies Operations
In particular, all crypto-related marketing or promotional materials will require unambiguous warnings and will be prohibited from offering rewards. While these laws were supposed to go into effect on October 8, the FCA has granted enterprises operating in the crypto asset industry an extension of three months to comply with these rules entirely.
Luno, a well-known crypto exchange platform in the United Kingdom, is not alone in reacting to the impending laws. In reaction to the FCA’s requirements, PayPal has declared that it will suspend crypto sales until 2024.
Nick Taylor, the Head of Public Policy at Luno, acknowledged the need for reform in reaction to the incoming rules in a statement shared with Coindesk. He mentioned, “The FCA has implemented new rules for crypto firms. As a result, all compliant crypto firms with U.K. customers are making a number of changes to their platforms in order to comply with the new regulations,” Taylor said. “For Luno, this includes pausing the ability to invest through the platform for some customers for the time being.”
The U.K.’s Travel Restrictions
Clients who have been affected by Luno’s temporary suspension of crypto investments can still sell their existing holdings and withdraw their funds from the platform. Taylor underlined that Luno is reintroducing investing alternatives to its consumers in stages. However, beginning on October 6, Luno’s clients would be unable to acquire or trade cryptocurrency.
With the upcoming adoption of the crypto asset financial promotions regime in the U.K. on October 8, 2023, the FCA recently conducted a thorough examination of the regulated crypto asset enterprises to assess their readiness.
After the FCA set the timeframe for adopting the Travel Rule, crypto firms in the U.K. are facing a significant regulatory shift. This law requires crypto companies operating in the U.K. to comply with stringent standards beginning September 1, 2023, including collecting, validating, and sharing critical information connected to crypto asset transfers.