Digital Currency Group Luno will suspend some services in the UK
Date: 2023-09-12 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
Luna, a subsidiary of Digital Currency Group (DCG), will soon be suspending some services across the UK. So says an internal company report dated September 11th.
This report contains information that the company will cease some cryptocurrency trading functions by October 6 in anticipation of new UK Financial Conduct Authority (FCA) rules set by the country's Financial Conduct Authority. In other words, these rules will seriously limit the ability of cryptocurrency companies to advertise their services; Among other things, this means a ban on the creation of referral programs.
The current report, based on a user email, states that Luno will stop buying and selling. Users will sell and withdraw their funds, but services are still suspended. Nick Taylor, head of public policy at Luno, said:
Taylor said the temporary suspension of service would only affect “certain individuals” and their ability to invest. He was unable to clarify which users this would affect.
He also suggested that Luno plans to reintroduce services in the UK at an unspecified later date and said the company intends to take a “phased approach”.
UK rules could impact local firms
This was followed by news indicating apparent financial problems at other Digital Currency Group subsidiaries. Gemini's lending arm remains in bankruptcy proceedings and owes $3.5 billion to creditors. DCG's asset management subsidiary, HQ Digital, was closed in early 2023. At the end of 2022, Luno stopped offering interest-bearing accounts.
Similar to the liquidity concerns that pervade US crypto firms, the latest development is related to regulatory changes and could alter the UK market.
Ahead of the UK rules, other companies have also cut their services. In particular, PayPal announced that from October its crypto services in the UK will be limited due to upcoming fees. In the Luno situation, PayPal will also block UK customers from buying and selling cryptocurrency, but will not prevent them from holding it on deposit.
In June, Binance also left England, although it was less clear whether this decision was related to the upcoming changes or regulatory difficulties in general.
