Copper Technologies Ltd., a prominent crypto custody firm based in the UK, has officially withdrawn its application for registration with the Financial Conduct Authority (FCA). This decision, announced on December 20, 2024, marks a significant shift in the company’s strategy as it pivots towards international markets under the leadership of its new CEO, Amar Kuchinad.
Background of the Withdrawal
Copper’s decision to withdraw follows a challenging regulatory environment in the UK. The firm initially failed to secure registration in 2022 amid stringent changes imposed by the FCA on crypto asset firms. The regulator has been known for its rigorous standards, with reports indicating that around 90% of crypto firms applying for licenses did not meet the necessary requirements. In recent assessments, only four crypto firms received licenses from the FCA over the past year, with many applicants either rejected or choosing to withdraw their applications due to failures related to anti-money laundering controls.
Strategic Shift to International Markets
With the withdrawal from the UK regulatory landscape, Copper is now focusing on expanding its operations globally. The firm has already secured regulatory approvals in several jurisdictions, including Switzerland, Hong Kong, and Abu Dhabi. Additionally, Copper has plans to enter the U.S. market, anticipating a more favorable regulatory environment under potential future administrations.Philip Hammond, former UK Chancellor of the Exchequer and current chair of Copper, has been instrumental in guiding the firm through these transitions. The company’s strategic pivot aims to establish a stronger international footprint while navigating the complexities of regulatory compliance in various regions.
Implications for the Crypto Custody Sector
Copper’s withdrawal from the UK licensing process reflects broader challenges faced by crypto firms operating within stringent regulatory frameworks. As companies like Copper seek opportunities abroad, this trend may signal a shift in how crypto custodians approach compliance and market expansion.Nikhil Rathi, CEO of the FCA, emphasized the importance of maintaining high standards for financial services in the UK, stating that effective authorization services are crucial for fostering a thriving financial ecosystem. However, as firms like Copper adapt their strategies in response to these challenges, it raises questions about the future landscape of cryptocurrency regulation in the UK and beyond.
Conclusion
The withdrawal of Copper Technologies from its UK registration plans highlights significant shifts within the cryptocurrency industry as firms navigate complex regulatory environments. As Copper focuses on international expansion and adapts to global market demands, it remains to be seen how this will impact its growth trajectory and influence within the crypto custody sector.
