Luno Exchange Pauses UK Client Investments in Light of Upcoming FCA Regulations

Luno, a cryptocurrency exchange under the ownership of Digital Currency Group (DCG), is taking temporary measures in response to new regulatory changes set to impact the crypto industry. 

These regulations, introduced by the UK’s Financial Conduct Authority (FCA) and scheduled to be enforced from October 8, are leading Luno to temporarily halt certain services for its UK-based clients.

UK clients of Luno recently received notifications via email, alerting them to the upcoming change. 

Starting from October 6, just two days before the new FCA regulations take effect, these clients will no longer be able to trade cryptocurrencies on the platform. 

This decision complies with the FCA’s new guidelines.

Nick Taylor, Luno’s Head of Public Policy, confirmed this move and emphasized that the restriction is a temporary measure. 

“The FCA has implemented new rules for crypto firms. As a result, all compliant crypto firms with U.K. customers are making a number of changes to their platforms in order to comply with the new regulations. For Luno, this includes pausing the ability to invest through the platform for some customers for the time being.”

According to Taylor, Cited by CoinDesk.

Despite the temporary restriction on investments, Luno users in the UK will still be able to sell and withdraw funds.

From 8 October 2023, #crypto firms must market to UK consumers clearly, fairly and honestly, and must also provide risk warnings people understand. https://t.co/cqxj1jVtAT

— Financial Conduct Authority (@TheFCA) September 7, 2023

FCA’s Focus on Crypto Marketing

The FCA’s new rules primarily revolve around the marketing and promotion of cryptocurrency trading. 

These regulations classify cryptocurrencies as “restricted mass market investments.” 

Consequently, all advertising and promotions related to crypto trading must adhere to specific guidelines, ensuring that they are “clear, fair, and not misleading.” 

Additionally, appropriate warnings must be prominently displayed in all crypto-related promotional materials.

Furthermore, the FCA is cracking down on trading incentives, such as bonuses, which will be prohibited under the new rules. 

This prohibition has been met with criticism from some cryptocurrency advocacy groups.

Sheldon Mills, the FCA’s Executive Director for Consumers and Competition, emphasized the importance of these rules in providing individuals with the necessary information to make informed decisions.  

“It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice.”

Mills stated.

In response to these regulatory changes, Luno is adopting a phased approach to reintroduce investment opportunities to its UK customers. 

While the temporary halt on certain investment services may inconvenience some users, it aligns with Luno’s commitment to regulatory compliance.

It’s worth noting that Luno is not the only company taking such measures in light of the FCA’s new regulations. 

PayPal has also announced plans to temporarily halt crypto purchases in the UK until 2024 in response to these regulatory changes.

NB: Any Information provided is NOT FINANCIAL ADVICE. Do Your Research before making any Financial Decisions.