Rebuildingsociety to appeal FCA crypto decision
Rebuildingsociety is planning to appeal the City watchdog’s decision to prevent it approving financial promotions for cryptoasset firms.
The Financial Conduct Authority (FCA) said on Tuesday that it was stopping the peer-to-peer lending platform from offering the service, days after it emerged that cryptocurrency exchange Binance had partnered with the company.
The FCA recently introduced new rules around cryptoasset promotions, most of which came into effect on 8 October.
Rebuildingsociety said it had “gone above and beyond the requirements to protect consumers in respect of its service to approve financial promotions for cryptoasset firms” but the FCA used its Own Initiative powers to stop it.
Rebuildingsociety had submitted a waiver request for an extension to allow it more time to comply with the FCA’s rules, which was also rejected on Tuesday.
“In correspondence with us, the FCA made reference to various due diligence expectations outlined in Guidance Consultation 23/1, but for which there is no corresponding policy statement,” Rebuildingsociety said in a blog post. “Upon questioning, the FCA explained that the relevant policy will be published in the Autumn of this year. In the absence of the policy, it’s disproportionate to hold S21 approvers to account for a framework that does not yet exist.
“We intend to appeal both the OIREQ [the FCA’s ruling using its own-initiative powers] and the waiver rejection at the Upper Tribunal on grounds of proportionality and failure to follow due process.”
The FCA said that the financial promotions regime is designed to protect consumers from misleading and harmful promotions.
“Unregistered cryptoasset firms can only legally communicate financial promotions to UK consumers if those promotions are approved by an authorised firm,” it said.
“If unregistered cryptoasset firms’ promotions cease to be approved by an authorised firm, they must cease promoting cryptoassets to UK consumers until such time as they can find an authorised firm to approve their financial promotions.
Read more: FCA issues final warning for cryptoasset firms
“Consumers who have invested with an unregistered cryptoasset firm who has had its promotions approved by Rebuildingsociety should still be allowed to receive communications about their existing assets that will allow them to withdraw, transfer or sell their existing assets.
“However consumers will not be able to receive promotions from unregistered cryptoasset firms related to further investment activity.”
The FCA said on Tuesday that it had issued 146 alerts about cryptoasset promotions on the first day under the new marketing rules.