Copper Technologies Withdraws UK FCA Application to Expand Internationally
On December 20, Copper Technologies Ltd. withdrew its application to register with the UK’s Financial Conduct Authority (FCA). This decision aligns with the company’s strategy to expand operations in international hubs under new CEO Amar Kuchinad.
Founded in 2018 and chaired by former UK Chancellor Philip Hammond, Copper has been a prominent crypto business in the UK. Despite holding temporary FCA registration, it did not secure full regulatory approval under the updated framework. The firm continued to service UK clients from Zug, Switzerland, but ultimately withdrew due to unmet FCA standards.
The FCA's stringent requirements have affected many crypto firms, with nearly 90% of applicants failing to meet its standards as of September 2024. Only four out of 35 applications were approved in the past year. This challenging environment has led companies like Binance to also withdraw their applications.
Shifting Priorities
In response to regulatory challenges, Copper is focusing on regions with more favorable frameworks, seeking licenses in Europe, Hong Kong, and Abu Dhabi. During the announcement of Kuchinad as CEO, Hammond indicated the company's plans for global growth, emphasizing confidence in the team’s ability to advance Copper's expansion.
Copper has made progress in Europe, operating as a trusted crypto custodian in Switzerland under the Swiss Financial Services Standards Association (VQF) and the Financial Market Supervisory Authority (FINMA). Additionally, it holds a regulatory license from Abu Dhabi's Financial Services Regulatory Authority (FSRA) to provide custody services for tokenized money market funds.
Stringent Scrutiny in UK’s Crypto Sector
The UK is a significant player in the global cryptocurrency market, ranking first in Central, Northern, and Western Europe (CNWE) and second worldwide in raw transaction volume, according to a 2023 Chainalysis report.
However, the strict regulatory landscape presents challenges for firms operating in the country. The UK government aims to integrate cryptocurrencies into its financial services framework through the Financial Services and Markets Bill, resulting in tough regulatory requirements that prompt businesses to reassess their strategies.