Digital-asset-as-a-service platform Zumo has become the first to integrate the Financial Conduct Authority’s (FCA) new tech-based requirements for cryptoasset firms.
The new cryptoasset financial promotions regime is set to take effect from 8 October 2023.
According to the FCA, the rules “aim to reduce and prevent harm to consumers from investing in cryptoassets that do not match their risk appetite”.
The new regulation mandated enhanced consumer protection methods, providing consumers with more confidence and security.
Zumo’s financial promotions technical flow design has been approved by the FCA and has now been implemented.
“The rigorous adherence to regulatory frameworks is not just about compliance but is a testament to our commitment to being the trusted and sustainable partner for digital assets, ensuring the safety and the integrity of the digital asset industry,” Zumo CEO Nick Jones said.
Earlier this month the FCA met with firms to assess their readiness for the new regulation in terms of scope and implementation.
It found that in general, most firms have faced “significant challenges” preparing for the regime, primarily in preparing the ‘back end’ financial promotion rules.
The FCA also found that firms “under-appreciated” the broad scope of the regime, were not sufficiently considering how some of the rules applied to specifics of the asset services they provide and that firms in global group structures are having to make “significant changes” to their business models to comply.
Finishing ahead of the deadline, Zumo head of compliance Michael Johnson said the company is “striving to set the standard for others in the industry” by being ready ahead of the deadline.
“With some operators pausing their UK operations, there will be many customers holding crypto who will be unable to buy or trade from 8 October,” Johnson said.
“We’re fully committed to working with our partners to provide a compliant environment in which they can continue their digital asset journey.”
Zumo has made its financial promotions technical flow available through its B2B API to support unregistered firms remain compliant with the FCA’s new regime after 8 October.