- PayPal responded to new UK regulations by suspending cryptocurrency purchases from 1 October.
- The temporary suspension of cryptocurrency purchases sheds light on the platform’s proactive approach to complying with regulatory changes.
Cryptocurrency transactions on PayPal’s UK platform were set to undergo a temporary suspension as the company moves to align with local financial regulations. Starting 1 October 2023, customers in the United Kingdom will be unable to purchase cryptocurrencies until the platform’s anticipated reactivation in early 2024.
PayPal will 'pause' crypto purchases in UK 🇬🇧 pic.twitter.com/NPkj7F61cC
— Crypto Crib (@Crypto_Crib_) August 16, 2023
This move comes as PayPal aims to comply with newly established regulations by the UK’s Financial Conduct Authority (FCA). These regulations impose additional prerequisites on cryptocurrency firms before customers can proceed with buying digital assets.
While the ability to purchase cryptocurrencies will be temporarily disabled, existing PayPal customers holding digital assets will retain the option to keep them within the platform without incurring any charges.
Additionally, these customers can execute sales of their cryptocurrencies at their convenience. PayPal communicated the decision to select customers in the UK via email.
Navigating UK Regulations
PayPal’s emergence as a cryptocurrency-friendly platform has been noticeable over the past years. One of its recent ventures in the cryptocurrency realm was the introduction of the PayPal USD (PYUSD) stablecoin in early August.
Furthermore, the company unveiled a new cryptocurrency hub feature on its interface, indicating its commitment to providing diversified cryptocurrency services.
The timing of this suspension coincides with the UK government’s readiness to enforce the “Travel Rule.”
These regulations, developed by the Financial Action Task Force (FATF), encompass stringent Know-Your-Customer (KYC) and Anti-Money Laundering (AML) measures. As of 1 September 2023, all cryptocurrency firms registered under the FCA must adhere to the Travel Rule’s stipulations. The government’s amendment of relevant legislation in July 2022 mandates this compliance.
The FCA’s ongoing efforts to regulate the cryptocurrency industry in the UK extend beyond the Travel Rule. Just last month, the authority asserted that all crypto asset firms must ensure their marketing strategies align with the UK’s financial promotions regime by October 2023.
This underscores the UK government’s commitment to maintaining transparency, fairness, and security in the burgeoning cryptocurrency sector.