The financial regulator in the UK, the Financial Conduct Authority (FCA) is hurting crypto firms in the country, Bittrex Global CEO Oliver Linch says.

Speaking in an interview with The Block, the CEO who is also a lawyer said the stringent rules proposed by the FCA have been the reason why several firms have stopped operation or abandoned the UK because they couldn’t meet up.

“For certain crypto players, the FCA’s rather stringent marketing rules are acting as a deterrent and a potential reason to leave the jurisdiction,” Linch “Keeping consumers safe is of paramount importance, but the best way to do that is by forming a legal framework that is comprehensible enough for the market to remain compliant with, and explicit enough for the regulator, in this case, the FCA, to enforce,” he added.

Lunch has several years of experience in financial regulation, first as Shearman & Sterling solicitor. He later became the General Counsel and is now the CEO of Bittrex Global. 

His company, Bittrex has also had its own fair share of regulatory challenges especially in the U.S where the country’s office shut down due to pressure from the securities and exchange commission. Bittrex Global itself had announced plans to shut down operations in November last year. 

UK Advertising Rules

The UK was known as a relatively friendly environment for crypto until the FCA introduced the crypto advertising rules. The rules stipulated penalties for crypto companies that violate the provisions of the rules, including a cooling-off period for first-time investors.

The rules which came into effect on 8 October in 2023 became a stumbling block for some top crypto firms, including Revolut, a UK fintech firm. The firm suspended crypto trading for UK customers in order to “give it more time to adjust to new requirements set by the Financial Conduct Authority in October.”

Other companies include PayPal which said last year that it was temporarily pausing crypto purchases in the UK until early 2024, and crypto exchange Bybit which exited the UK in October due to the rule change.

OKX and Binance are other exchanges that were impacted. The two exchanges announced that they were reevaluating their strategies amid the rule change. 

The Positive Side

Although Linch criticized the UK’s crypto rules that seem to be suffocating some crypto firms, he also commended the crypto Sandbox, which seeks to make crypto available for use in the wider financial market.

“The Digital Securities Sandbox is a really positive initiative and a good example of the UK taking ownership of its crypto ambitions,” Linch said. “So long as potential market participants engage enthusiastically with the programme, then the adoption of crypto will continue to rise.”

He however cautioned that unless steps are taken to create a comprehensive legal framework that will implement the Sandbox, the dream of making the UK a crypto hub may never come to pass. 

“The next step is taking the learnings from the Sandbox — direct from the industry — and implementing them into a comprehensive legal framework so that regulated crypto activity can exist outside of that bubble and propel the UK forward,” Linch said. “The Digital Securities Sandbox will help but only legislation will suffice.”

He also added that the government and the FCA need to find a point of agreement as the two seem to be polarized in their views on crypto currently.