Last week, crypto broker CoinBurp stated that it acquired $6 million to start a buying and selling platform for NFTs. These digital assets are gaining traction among investors, but criticism from regulators as well. The broker planned an initial exchange offering and launch of its token, $BURP, on Monday, July 26. On Sunday, however, Britain’s Financial Conduct Authority said that CoinBurp didn’t have the authorization for it. In a statement, the FCA said that CoinBurp submitted an application for FCA registration, but has yet to be fully registered under the transfer of funds and money laundering regulations.
For context, the FCA became the supervisor for anti-money laundering and counter-terrorist financing regulations. The regulatory authority will oversee activities by crypto firms that are operating as businesses in the UK. These activities include exchanging crypto assets into (fiat) currency and currency into crypto assets. It also pertains to the exchange of one crypto asset for another crypto asset. Consequently, the definition also involves firms creating tokens themselves and issuing them, something that is commonly known as the ‘initial coin offering.’
While CoinBurp is on the FCA’s temporary registration list, it doesn’t permit a firm to make claims that they have FCA authorization or registration. The FCA clarified that although firms with a temporary registration status can continue trading, they haven’t undergone a thorough assessment to be deemed proper. They added that the FCA hadn’t determined CoinBurp’s application for purposes of money laundering regulations.
The FCA also informed consumers that they have limited jurisdiction in protecting consumers when it comes to investing in crypto assets like NFTs. They previously issued warnings regarding the risks of investing in crypto assets. They explained that consumers wouldn’t be able to rely on the Financial Services Compensation Scheme or Financial Ombudsman Service in the event that their investment goes wrong. Hence, interested investors should keep in mind how quickly crypto tokens can fluctuate in value, before taking any risks.
CoinBurp has not responded, but the website still has mentions of their coin’s upcoming launch, stating that “$BURP is coming,” and that users can “be the first to know” about it.
Building such a platform means that CoinBurp will list NFTs on the market as regulated brokers. These assets will then be available in small and large quantities for interested investors.
The FCA’s recent statement is the latest among warnings that consumers could potentially lose money in crypto assets. Earlier, in June, the FCA stated that one of the biggest cryptocurrency exchanges in the world, Binance, didn’t have permission to conduct regulated activities. They warned consumers about the crypto exchange platform. Since then, Binance has been the subject of much regulatory scrutiny across the world.