Late last year, the payments provider received a s166 notice from the U.K. financial services regulator. The investigation has come to a conclusion.
BCB Group, a payments processor that connects cryptocurrency firms to the banking system, was the focus of a now-closed investigation by the U.K. financial services regulator, according to two individuals with knowledge of the matter.
The individuals who spoke on condition of anonymity due to the nature of the matter stated that the Financial Conduct Authority, or FCA, issued BCB a “s166 notice” late last year. BCB has since concluded the investigation in a manner that a source close to the company has deemed favourable. According to a third individual, BCB is currently engaged in constructive discussions with the regulator regarding the expansion of its licence.
BCB Group’s CEO, Oliver Tonkin, stated in an email that the organization has consistently prioritized compliance in its business operations. “We maintain a positive relationship with all of our regulators, including those who oversee our licensed businesses, and we engage in consistent, transparent communication with them.” He further stated, “Our interactions with the FCA have been consistently favorable, and we have recently been granted permission to broaden our regulatory presence in the United Kingdom if we so choose.”
BCB and other payments companies are critical intermediaries in the digital assets ecosystem, particularly in light of the bankruptcy of several crypto-friendly institutions in the United States last year. They furnish financing pipelines to several of the most significant institutions in the digital-asset sector, including exchanges such as Bitstamp, Crypto.com, Gemini, and Kraken.
The nature of the inquiry that BCB encountered is unclear. The FCA may initiate a s166 assessment for a variety of reasons. There may be apprehensions regarding a company’s regulatory obligations and its compliance with particular regulations. Potential misconduct concerns may be a source of concern for the regulator. Additionally, the supervisory body may harbour reservations regarding the financial stability and risk management procedures of an organisation. Additionally, the FCA has the authority to initiate an investigation in the event that it suspects market abuse or misconduct.
The FCA issues approximately 50 of these notices to companies in the United Kingdom each year, and BCB is not an exception.
CoinDesk has reported that Natasha Powell, the former chief compliance officer at BCB, has resigned from the company. In November, she will assume the position of director of U.K. compliance at the crypto exchange Kraken.
Powell will continue to serve as a non-executive director of BCB Payments Ltd., the group’s U.K.-regulated payments operation, and will maintain his affiliation with BCB.
An investor who remains unidentified recently approached the payments processor with a takeover proposal, CoinDesk disclosed last month. According to individuals with knowledge of the situation, the prospective acquirer instigated the acquisition interest during BCB’s investigation of a Series B funding round.
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