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The UK regulator says it has the power to cancel a crypto business’s registration if it fails to meet required standards.
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Bitpanda announced the acquisition of DeFi custodian Trustology on Tuesday morning.
The UK financial regulator, the Financial Conduct Authority (FCA), has warned crypto asset businesses about mergers, citing a lack of regulatory mechanisms to assess whether new owners meet required standards.
The FCA’s statement came shortly after crypto exchange Bitpanda announced its acquisition of UK-registered DeFi custodian platform Trustology.
Regulated businesses must meet requirements
According to the regulator, Trustology is a business regulated under the country’s Money Laundering Regulations (MLR).
The acquisition offers benefits to the buyer under MLR rules. However, those provisions do not grant the regulator access to evaluate the fitness and propriety of new owners or changes in control before a transaction completes, the FCA said in a statement.
“The MLR does not include any provisions that enable the FCA to assess the suitability and propriety of beneficial owners or changes of control prior to completion of a transaction,” the agency said.
In this respect, the scope of the MLR differs from other regulatory regimes, the statement added. The FCA retains supervisory, authorization and enforcement powers over all businesses operating in the UK.
“The FCA can take steps to suspend or cancel the registration of a crypto asset business if the MLR is not satisfied that the firm or its beneficial owners are fit and proper,” the financial markets regulator warned.
The FCA also noted that it can suspend or cancel a crypto firm’s registration if it determines the firm has failed to meet the required standards.
Bitpanda announced on Tuesday that it had acquired Trustology, marking one of the first mergers of its kind in the UK’s crypto regulatory landscape.
Bitpanda is a crypto exchange headquartered in Austria and regulated in the EU. According to the exchange, acquiring a custodian wallet provider supports its plan to transition Bitpanda Pro toward a full-service prime broker platform.