UK FCA Once Probes BCB Group over Compliance Concerns

BCB Group faced and survived a UK FCA investigation according to sources close to the matter.

Key Notes

BCB Group faced a subtle probe from the UK FCA in 2023.Concerns were raised on some of its compliance strategies.Scrutiny of crypto-linked payment firms increased post Silvergate collapse.

New information has revealed that Europe’s leading payment service provider BCB Group once fell under the UK Financial Conduct Authority (FCA)’s radar.

Only a little was heard of it until now, but the investigation has long been concluded. Two people familiar with the matter but requested to remain anonymous stated that the crypto payment processor received a Section 166 (s166) notice from the FCA in 2023.

This, as sources claimed, began the UK regulator’s investigation into BCB Group.

BCB Group Serves Top Crypto Exchanges

Another source close to the financial firm claimed the investigation favored BCB Group in the long run. The firm is in constructive talks with the regulator, seeking strategies and authorization to expand its regional license. While many details were not provided about the context of the investigation, the FCA usually commissioned an s166 notice when it is concerned about aspects of a regulated firm’s activities and wants further investigation.

The regulator could be concerned about the company’s regulatory requirements and whether it complies with specific rules. The FCA may also suspect potential misconduct issues, BCB Group’s risk management processes, financial stability, or even market abuse or misconduct.

It is worth noting that the role of companies like BCB Group became prominent after the collapse of Silicon Valley Bank and Signature Bank in 2022. BCB Group became one of the financial institutions providing banking rails to top digital asset firms. Some beneficiaries of its traditional banking services are crypto exchanges like Bitstamp, Crypto.com, Gemini, and Kraken.

However, the FCA has become quite tough with its regulation, causing many crypto firms to pursue business in other regions. Over a year ago, the crypto exchange Bybit announced its decision to suspend operations in the UK.

As an exchange not listed on the FCA’s crypto register, Bybit was rendered ineligible to continue its advertising and promotional activities in the country.

BCB Group Upholds Regulatory Compiance Globally

According to Oliver Tonkin, the CEO of BCB Group, his firm has always invested in regulatory compliance. They run a compliance-first approach and plan to continue doing so. Even recently, the firm secured regulatory approval from Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR) of France.

The Electronic Money Institution (EMI) and Digital Assets Services Provider (DASP) license gave BCB Group the legal right to enter the country and offer its products to customers in the region.

“We have regular open and transparent dialogue with all our regulators across our licensed businesses and from our perspective we are in good standing with them all. Our engagement with the FCA continues to be positive and we have recently been given the green light to expand our regulatory footprint in the UK should we wish to do so,” Tonkin added.

Ultimately, BCB intends to diversify its portfolio of regulatory licenses and approvals outside the European Economic Area (EEA).

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