Crypto Sales Halt: PayPal to suspend crypto sales for UK customers in October due to stricter regulations by the Financial Conduct Authority (FCA).
FCA’s Stricter Rules: FCA’s new regulations demand risk warnings and cessation of “refer a friend” incentives in crypto ads, effective from October 8.
Customer Retention: PayPal’s email states that clients can keep and trade cryptocurrency during sales suspension.
PayPal will stop selling bitcoin to UK consumers in October due to new crypto advertising restrictions.
Later this year, the Financial Conduct Authority will implement stricter advertising regulations for crypto assets to UK consumers.
In addition to other restrictions, the new rules will require crypto firms to publish risk warnings alongside advertisements and cease offering “refer a friend” incentives.
In an email to customers, the fintech company stated it will ‘temporarily suspend’ the ability for customers to purchase cryptocurrencies on its platform beginning October 1 as it works to comply with the new regulations, which take effect on October 8.
Customers were informed that PayPal works closely with global regulators to comply with market requirements.
It added that customers could retain and sell their crypto ‘at any time.
In May, members of parliament demanded that the government regulate cryptocurrency trading in the same manner as gambling, citing concerns that it poses significant dangers to consumers.
Sheldon Mills, executive director of consumers and competition at the FCA, stated: ‘It is up to individuals to decide whether or not to purchase cryptocurrencies when the FCA announced its crypto marketing reorganization in June.
However, research indicates that many regret making rash decisions. Our regulations provide individuals with the necessary time and risk warnings to make an informed decision.
Cryptocurrency remains mainly unregulated and high-risk. Those who invest must be willing to forfeit their entire investment.
‘The crypto industry must immediately plan for this significant shift. We are developing additional instructions to assist them in meeting our standards.
As consumers, regulators, and governments grapple with scamming and the use of cryptocurrencies by untraceable criminal organizations. There is an increase in calls for greater regulation on a global scale.
Several crypto firms, including FTX, collapsed last year, leaving neophyte investors with significant losses.
FTX failed when withdrawals depleted its reserves, forcing CEO Sam Bankman-Fried to quit in November 2012.
Allegations circulated that he ran it as a ‘personal fiefdom’ while spending £250 million on real estate.
Approximately a million creditors stand to lose billions of pounds, among them an estimated eighty thousand Britons.
The top cryptocurrency bitcoin has risen 76% this year after a sharp fall in 2017. However, its price is currently less than half of its November 2021 all-time high.
At the beginning of this month, PayPal launched a stablecoin, becoming the first significant financial technology company to adopt digital currencies for payments and transfers.
PayPal USD, issued by Paxos Trust Company, is tied to the U.S. dollar, unlike bitcoin.
The group also stated that the digital currency would initially be made available to PayPal customers in the United States, excluding Hawaii, and would be redeemable for US dollars at a rate of one-to-one.
