{"id":6431,"date":"2021-06-03T10:39:37","date_gmt":"2021-06-03T10:39:37","guid":{"rendered":"https:\/\/newmoneyreview.com\/?p=6431"},"modified":"2021-06-20T18:54:00","modified_gmt":"2021-06-20T18:54:00","slug":"fca-warns-on-client-money-held-at-cryptoasset-firms","status":"publish","type":"post","link":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/","title":{"rendered":"FCA says client money at cryptoasset firms is at risk"},"content":{"rendered":"

The UK\u2019s financial services regulator has warned that client money is not safe if held at a cryptoasset firm.<\/p>\n

The warning came as the Financial Conduct Authority (FCA) announced it is extending a temporary registration regime for cryptoasset firms seeking to do business in the UK.<\/p>\n

In a statement issued today<\/a>, the FCA said it was pushing back the end date of the temporary regime from 9 July 2021 to 31 March 2022.<\/p>\n

The temporary registration regime was established late last year to allow existing cryptoasset firms that had applied for registration to continue trading.<\/p>\n

In its statement from today, the FCA added that many of the firms applying for registration have not made the grade.<\/p>\n

\u201cA significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations,\u201d the FCA said.<\/p>\n

\u201cThis has resulted in an unprecedented number of businesses withdrawing their applications.\u201d<\/p>\n

In January it became clear that only three firms out of more than 100 cryptoasset firm applicants<\/a> had achieved registered status with the FCA by an earlier deadline.<\/p>\n

The list of applicants<\/a> revealed a startling cross-section of firms, from those with tens of millions of clients to single-director companies with no trading history.<\/p>\n

The cryptoasset firm activities requiring registration in the UK include running a cryptocurrency exchange, operating a cryptocurrency ATM and offering cryptocurrency custody services.<\/p>\n

\u201cThis has resulted in an unprecedented number of businesses withdrawing their applications\u201d<\/p><\/blockquote>\n

 <\/p>\n

In its statement, the FCA added a warning that many cryptoassets are highly speculative and outside its remit.<\/p>\n

“Many cryptoassets can lose value quickly. The FCA does not have consumer protection powers for the cryptoasset activities of firms,” the regulator said.<\/p>\n

The FCA also said it was not responsible for ensuring that client money held by cryptoasset firms is safe.<\/p>\n

In the case of a cryptoasset firm\u2019s failure, \u201cit is unlikely that consumers will have access to the Financial Ombudsman Service or Financial Services Compensation Scheme, irrespective of whether a firm has temporary or full registration,\u201d the FCA warned.<\/p>\n

“The FCA does not have consumer protection powers for the cryptoasset activities of firms”<\/p><\/blockquote>\n

Last month, the FCA also required CEOs of e-money firms to write to their customers and warn them of the potential risks to client money.<\/a><\/p>\n

It asked those CEOs to remind clients that in the case of an e-money firm\u2019s failure they will have no recourse to the Financial Services Compensation Scheme, which insures retail bank deposits up to a limit of \u00a385,000 per person, per account.<\/p>\n

Client money held by authorised e-money firms and payment institutions is protected by an internal accounting process called ‘safeguarding’.<\/p>\n

The safety of e-money has been a hot topic<\/a> since last year\u2019s failure of German payments firm Wirecard, which had a knock-on effect<\/a> on many UK-based electronic money institutions.<\/p>\n

With its statement today, the FCA appears to be clarifying that there\u2019s a hierarchy of state-guaranteed protection when it comes to client money, with bank deposits at the top, e-money next and cryptoassets very much at the bottom.<\/p>\n

Sign up here<\/a> for the New Money Review newsletter<\/em><\/p>\n

Click here<\/a> for a full list of episodes of the New Money Review podcast: the future of money in 30 minutes<\/em><\/p>\n

Related content from New Money Review<\/em><\/span><\/p>\n

How safe is e-money?<\/a><\/p>\n

Bank of England warns of money Wild West<\/a><\/p>\n

Whales and minnows join UK cryptoasset boom<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The UK\u2019s financial services regulator has warned that client money is not safe if held at a cryptoasset firm. The warning came as the Financial Conduct Authority (FCA) announced it […]<\/p>\n","protected":false},"author":4,"featured_media":6432,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1013,1012,1053,1014,1011],"tags":[2019,1869,1799,1189,2020],"class_list":{"0":"post-6431","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-account","8":"category-exchange","9":"category-featured-1","10":"category-payment","11":"category-value","12":"tag-client-money","13":"tag-cryptoasset","14":"tag-e-money","15":"tag-fca","16":"tag-register"},"yoast_head":"\nFCA says client money at cryptoasset firms is at risk - New Money Review<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FCA says client money at cryptoasset firms is at risk - New Money Review\" \/>\n<meta property=\"og:description\" content=\"The UK\u2019s financial services regulator has warned that client money is not safe if held at a cryptoasset firm. The warning came as the Financial Conduct Authority (FCA) announced it […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\" \/>\n<meta property=\"og:site_name\" content=\"New Money Review\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-03T10:39:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-06-20T18:54:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1400\" \/>\n\t<meta property=\"og:image:height\" content=\"934\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"New Money Review Staff\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@newmoneyreview\" \/>\n<meta name=\"twitter:site\" content=\"@newmoneyreview\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"New Money Review Staff\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\"},\"author\":{\"name\":\"New Money Review Staff\",\"@id\":\"https:\/\/newmoneyreview.com\/#\/schema\/person\/34c47dea9161c6b33d0ca38dc5972730\"},\"headline\":\"FCA says client money at cryptoasset firms is at risk\",\"datePublished\":\"2021-06-03T10:39:37+00:00\",\"dateModified\":\"2021-06-20T18:54:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\"},\"wordCount\":566,\"publisher\":{\"@id\":\"https:\/\/newmoneyreview.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg\",\"keywords\":[\"client money\",\"cryptoasset\",\"e-money\",\"FCA\",\"register\"],\"articleSection\":[\"ACCOUNT\",\"EXCHANGE\",\"Featured\",\"PAYMENT\",\"VALUE\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\",\"url\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\",\"name\":\"FCA says client money at cryptoasset firms is at risk - New Money Review\",\"isPartOf\":{\"@id\":\"https:\/\/newmoneyreview.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg\",\"datePublished\":\"2021-06-03T10:39:37+00:00\",\"dateModified\":\"2021-06-20T18:54:00+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage\",\"url\":\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg\",\"contentUrl\":\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg\",\"width\":1400,\"height\":934},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/newmoneyreview.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"FCA says client money at cryptoasset firms is at risk\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/newmoneyreview.com\/#website\",\"url\":\"https:\/\/newmoneyreview.com\/\",\"name\":\"New Money Review\",\"description\":\"A periodical covering the accelerating changes in money\",\"publisher\":{\"@id\":\"https:\/\/newmoneyreview.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/newmoneyreview.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/newmoneyreview.com\/#organization\",\"name\":\"New Money Review\",\"url\":\"https:\/\/newmoneyreview.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/newmoneyreview.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2018\/01\/cropped-nmr_close-crop.jpg\",\"contentUrl\":\"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2018\/01\/cropped-nmr_close-crop.jpg\",\"width\":1418,\"height\":158,\"caption\":\"New Money Review\"},\"image\":{\"@id\":\"https:\/\/newmoneyreview.com\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/x.com\/newmoneyreview\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/newmoneyreview.com\/#\/schema\/person\/34c47dea9161c6b33d0ca38dc5972730\",\"name\":\"New Money Review Staff\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/newmoneyreview.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/dde30bd01b88010f95b116e674eb3b5b8ef18e77ebe766eceab195eb45d35934?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/dde30bd01b88010f95b116e674eb3b5b8ef18e77ebe766eceab195eb45d35934?s=96&d=mm&r=g\",\"caption\":\"New Money Review Staff\"},\"url\":\"https:\/\/newmoneyreview.com\/index.php\/author\/new-money-review-staff\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"FCA says client money at cryptoasset firms is at risk - New Money Review","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/","og_locale":"en_GB","og_type":"article","og_title":"FCA says client money at cryptoasset firms is at risk - New Money Review","og_description":"The UK\u2019s financial services regulator has warned that client money is not safe if held at a cryptoasset firm. The warning came as the Financial Conduct Authority (FCA) announced it […]","og_url":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/","og_site_name":"New Money Review","article_published_time":"2021-06-03T10:39:37+00:00","article_modified_time":"2021-06-20T18:54:00+00:00","og_image":[{"width":1400,"height":934,"url":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg","type":"image\/jpeg"}],"author":"New Money Review Staff","twitter_card":"summary_large_image","twitter_creator":"@newmoneyreview","twitter_site":"@newmoneyreview","twitter_misc":{"Written by":"New Money Review Staff","Estimated reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#article","isPartOf":{"@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/"},"author":{"name":"New Money Review Staff","@id":"https:\/\/newmoneyreview.com\/#\/schema\/person\/34c47dea9161c6b33d0ca38dc5972730"},"headline":"FCA says client money at cryptoasset firms is at risk","datePublished":"2021-06-03T10:39:37+00:00","dateModified":"2021-06-20T18:54:00+00:00","mainEntityOfPage":{"@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/"},"wordCount":566,"publisher":{"@id":"https:\/\/newmoneyreview.com\/#organization"},"image":{"@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage"},"thumbnailUrl":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg","keywords":["client money","cryptoasset","e-money","FCA","register"],"articleSection":["ACCOUNT","EXCHANGE","Featured","PAYMENT","VALUE"],"inLanguage":"en-GB"},{"@type":"WebPage","@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/","url":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/","name":"FCA says client money at cryptoasset firms is at risk - New Money Review","isPartOf":{"@id":"https:\/\/newmoneyreview.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage"},"image":{"@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage"},"thumbnailUrl":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg","datePublished":"2021-06-03T10:39:37+00:00","dateModified":"2021-06-20T18:54:00+00:00","breadcrumb":{"@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#primaryimage","url":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg","contentUrl":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg","width":1400,"height":934},{"@type":"BreadcrumbList","@id":"https:\/\/newmoneyreview.com\/index.php\/2021\/06\/03\/fca-warns-on-client-money-held-at-cryptoasset-firms\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/newmoneyreview.com\/"},{"@type":"ListItem","position":2,"name":"FCA says client money at cryptoasset firms is at risk"}]},{"@type":"WebSite","@id":"https:\/\/newmoneyreview.com\/#website","url":"https:\/\/newmoneyreview.com\/","name":"New Money Review","description":"A periodical covering the accelerating changes in money","publisher":{"@id":"https:\/\/newmoneyreview.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/newmoneyreview.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Organization","@id":"https:\/\/newmoneyreview.com\/#organization","name":"New Money Review","url":"https:\/\/newmoneyreview.com\/","logo":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/newmoneyreview.com\/#\/schema\/logo\/image\/","url":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2018\/01\/cropped-nmr_close-crop.jpg","contentUrl":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2018\/01\/cropped-nmr_close-crop.jpg","width":1418,"height":158,"caption":"New Money Review"},"image":{"@id":"https:\/\/newmoneyreview.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/x.com\/newmoneyreview"]},{"@type":"Person","@id":"https:\/\/newmoneyreview.com\/#\/schema\/person\/34c47dea9161c6b33d0ca38dc5972730","name":"New Money Review Staff","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/newmoneyreview.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/dde30bd01b88010f95b116e674eb3b5b8ef18e77ebe766eceab195eb45d35934?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/dde30bd01b88010f95b116e674eb3b5b8ef18e77ebe766eceab195eb45d35934?s=96&d=mm&r=g","caption":"New Money Review Staff"},"url":"https:\/\/newmoneyreview.com\/index.php\/author\/new-money-review-staff\/"}]}},"jetpack_featured_media_url":"https:\/\/newmoneyreview.com\/wp-content\/uploads\/2021\/06\/fca.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/posts\/6431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/comments?post=6431"}],"version-history":[{"count":10,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/posts\/6431\/revisions"}],"predecessor-version":[{"id":6442,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/posts\/6431\/revisions\/6442"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/media\/6432"}],"wp:attachment":[{"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/media?parent=6431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/categories?post=6431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newmoneyreview.com\/index.php\/wp-json\/wp\/v2\/tags?post=6431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}