Update Dec. 20, 10:40 am UTC: This article has been updated to include exclusive interview comments from Copper.
Background on Copper Technologies
Copper Technologies, a cryptocurrency custody firm backed by British multinational bank Barclays, has made a significant move in the UK crypto market. The company, chaired by former UK Chancellor of the Exchequer Philip Hammond, has withdrawn its crypto license application with the UK’s Financial Conduct Authority (FCA).
Copper’s Decision to Withdraw Application
According to exclusive comments from Copper, the firm will shift its focus to foreign hubs under its new CEO, Amar Kuchinad. This decision was made after the company failed to secure a permanent UK registration in 2022. Since then, Copper has been prioritizing regulatory approvals and licenses in Switzerland, Hong Kong, and Abu Dhabi.
Copper’s Global Expansion Strategy
Copper’s former CEO Dmitry Tokarev stepped down in October, with Kuchinad taking over as global CEO. In a statement on Copper’s UK license application withdrawal, Kuchinad noted that refining the company’s global growth strategy has been his priority since joining.
‘Refining Copper’s global growth strategy has been my priority since joining, and this has necessitated key decisions on our direction and approach,’ Kuchinad said. ‘Withdrawing our application to register as a crypto asset institution in the UK is the right decision for our business and reflects our refocus on driving growth in priority markets and the expansion of our product portfolio.’
Priority Markets
Kuchinad noted that Europe, the US, and the Middle East remain Copper’s priority markets. Despite the withdrawal of its UK license application, Copper continues to see the UK as one of its key markets alongside these regions.
‘We remain committed to the UK, which has been, and will continue to be a central part of the Copper story,’ Kuchinad stated.
FCA Crypto Registration Statistics
Copper’s decision to withdraw its application comes soon after the FCA reported that nearly 90% of crypto license applicants failed to meet its standards as of September 2024. The regulator said it only approved four out of 35 applications for cryptocurrency firm registration in the past year, with 15 applications withdrawn and nine rejected.
‘Over 87% of crypto registrations were withdrawn, rejected or refused for weak money laundering controls,’ the FCA noted in its 2024 annual report issued on Sept. 5.
Related Developments
The FCA has been working to enhance regulatory standards in the crypto market. In a related development, the regulator released a discussion paper on crypto market transparency and abuse.
Industry Insights and Analysis
Copper’s withdrawal of its UK license application marks a significant shift in the company’s global expansion strategy. The decision reflects the challenges faced by crypto firms in securing regulatory approvals in major markets.
Regulatory Environment
The FCA’s statistics highlight the difficulties faced by crypto firms in meeting regulatory standards. The regulator’s focus on money laundering controls has led to a high rate of application withdrawals and rejections.
Market Impact
Copper’s withdrawal of its UK license application may have implications for the company’s growth prospects in the region. However, the firm’s commitment to the UK market suggests that it remains committed to serving customers in this key region.
Conclusion
The withdrawal of Copper’s UK crypto license application marks a significant development in the UK crypto market. The decision reflects the challenges faced by crypto firms in securing regulatory approvals and highlights the importance of meeting regulatory standards. As the industry continues to evolve, companies like Copper will need to adapt to changing regulatory environments.
