PayPal Receives Operational License from UK’s Financial Conduct Authority
Payment giant PayPal has obtained an operational license from the UK’s Financial Conduct Authority (FCA) to provide virtual currency services after a lengthy application process.
According to a PayPal spokesperson, the approval from the FCA allows PayPal UK Ltd to transfer customer accounts from Paypal Europe to this new UK entity on 1 November 2023. However, this license comes with restrictions. The FCA prohibits PayPal from engaging in initial coin offerings (ICOs), staking and lending, borrowing in decentralized finance (DeFi), and supporting peer-to-peer exchanges. Existing customers will also be limited to PayPal’s hold-and-sell functionalities.
As a result of these restrictions, PayPal cannot onboard new users for its crypto services, and existing customers are unable to purchase digital assets like bitcoin (BTC) following a temporary ban in October. The ban was attributed to new FCA regulations, with PayPal aiming to resume full operations in 2024 after satisfying these regulations.
Cracking down on Erring Industry Players
PayPal’s license approval by the FCA is part of the regulatory body’s efforts to bring licensed crypto firms to the UK. This marks the fourth approval, following Bitstamp, Interactive Brokers, and Komainu. The FCA’s strict stance has also forced unregistered virtual asset service providers like Bybit and Luno to cease their operations in the UK. Additionally, the FCA has shut down unregistered bitcoin ATMs and issued new guidelines for promotional activities to protect UK consumers.
Overall, this move by the FCA underscores its commitment to enforcing regulations in the crypto industry, ensuring compliance with rules to protect consumers from potential risks.
### News source: zycrypto.com