Copper Withdraws UK Registration, Shifts Focus Overseas

Highlights:

• Copper withdraws UK registration and shifts focus to overseas hubs.
• The UK FCA rejected 87% of crypto license applications in 2024.
• Copper is shifting focus on the US, Europe, and the Middle East.

Copper Technologies Limited, a cryptocurrency custodian, has withdrawn its application to register with the UK’s FCA. Bloomberg reported that the move is in line with the company’s new strategy of expanding operations in international markets under its new leadership. 

Crypto custodian Copper Technologies withdraws its application to register with the UK’s financial regulator, saying it will shift to focus on overseas hubs under its new CEO https://t.co/9Sp24WwsnW

— Bloomberg Crypto (@crypto) December 20, 2024

Regulatory Challenges in the UK

The FCA’s rules have posed difficulties to the crypto businesses and have helped shape the current compliance landscape. In its report of September 2024, the FCA disclosed that 87% of the crypto license applications were withdrawn or denied for failure to meet the required standards in combating money laundering. 

Out of 35 applications, only four were granted within the last one year. Copper like the other firms faced challenges in meeting these requirements and which are key factors that led to its withdrawal.

The UK has enacted a new regulatory regime for crypto assets during the tenure of the Labour government. However, this has not deterred firms from seeking out better climates elsewhere. This reflects the increasing challenge of operating within the UK regulatory framework as seen with Copper’s exit.

Copper’s Global Expansion Plans

Copper’s move comes after a leadership transition, with Amar Kuchinad joining the company as CEO in October 2024. Most of Kuchinad’s operations are in New York, and the firm has not given as much importance to UK regulatory frameworks. He has also stressed the need to bolster Copper’s operations in some countries, including the United States, Switzerland, Hong Kong, and Abu Dhabi.

We are thrilled to announce the appointment of Amar Kuchinad as the new Global CEO of Copper, taking over from Copper’s founder Dmitry Tokarev.

Over the past seven years, @tokarev_d has not only built Copper from the ground up but has also set a high standard for innovation in… pic.twitter.com/iEbbWMQ2zu

— Copper.co (@CopperHQ) October 14, 2024

The company had earlier obtained a provisional UK license but it could not get the complete recognition in 2022. Since then, it has won regulatory licenses in Switzerland as well as in Abu Dhabi. Due to the favorable regulatory frameworks these jurisdictions provide for crypto firms, Copper is able to expand its services.

Copper also announced in October that it will seek regulatory custodial and money transmitter licenses in the United States, where pro-crypto policies under President Donald Trump are expected. Currently, the United States, European countries, and Middle Eastern countries have become the main markets for this company.

Future Prospects and Challenges

Despite withdrawing from the UK, Copper remains committed to its European operations. It has secured licenses in Switzerland under FINMA and in Abu Dhabi through the FSRA. The firm has also started offering tokenized money market fund custody services, including partnerships with major players like BlackRock.

The UK’s position as a crypto hub faces increasing competition from global financial centers like the U.S. and Hong Kong. Although the UK government aims to integrate crypto into its financial system, firms like Copper are prioritizing regions with less stringent regulations.

Despite the FCA’s strict rules, several firms have upgraded in order to match the new guidelines. In November, Bitget restarted its operations in UK after complying with the local regulations. Moreover, in September Nexo resumed client registrations after a 10-month pause after multiple upgrades ensuring compliance.