In a rapidly evolving fintech landscape, Zumo, a UK-based digital-asset-as-a-service platform, has become the first digital asset platform to have integrated tech-based requirements of the Financial Conduct Authority’s (FCA’s) new financial promotions regime for cryptoasset firms, which officially take effect beginning 8 October 2023.
A financial promotions technical flow design by Zumo, that was deemed appropriate by the FCA, is now fully implemented. This early compliance underscores Zumo’s own commitment to setting the highest standards in regulatory alignment and consumer protection.
The new regulation by the FCA mandates enhanced consumer protection measures and looks to prevent harm to consumers from investing in cryptoassets that do not match their risk appetite. It explained that, while it is completely up to consumers to decide whether they buy crypto, they should be able to make this decision with access to fair and accurate information that helps them make effective investment decisions.
Zumo explained that it has not integrated this development to ensure consumer confidence and security – amidst a volatile backdrop where major players have paused their UK operations.
The FCA also recently expressed concern that many of the 150 or so unregistered crypto firms with UK customers have yet to even respond to the regulator. It explained that it has warned firms promoting cryptoassets to UK consumers that they must get ready for the new regime, via statements on the FCA website, sending multiple letters to firms and numerous industry engagements.
Overall, of the over 150 firms the FCA tried to contact, only 24 firms responded (as of 21 September).
Striving to set the standard for others in the industry
Nick Jones, CEO of Zumo, discussed the importance of meeting the FCA’s regulatory standards: “The rigorous adherence to regulatory frameworks is not just about compliance but is a testament to our commitment to being the trusted and sustainable partner for digital assets, ensuring the safety and the integrity of the digital asset industry.”
Zumo explained that its readiness should set a good example to other fintech and crypto firms navigating the new financial promotions landscape. Zumo’s financial promotions technical flow is now also available through the company’s B2B API to support unregistered firms to remain compliant after 8 October 2023.
Michael Johnson, head of compliance, Zumo, explained how the platform approached the new regime: “We didn’t just beat the deadline; we are striving to set the standard for others in the industry.
“Our early compliance demonstrates not just our technical and ethical rigour but underscores our commitment to leading the industry in transparency, innovation and consumer protection. With some operators pausing their UK operations, there will be many customers holding crypto who will be unable to buy or trade from 8 October.”