SUMMARY

• Crypto exchange CEX.IO has resumed operations in the UK after meeting the FCA’s registration guidelines.
• Like Nexo, CEX.IO has partnered with FCA-authorized Gateway 21 to support its return to the market.

CEX.IO, a centralized crypto exchange, resumed operations in the UK after meeting compliance requirements set by the Financial Conduct Authority (FCA). The company had deliberately suspended its services in response to the FCA’s execution of new regulations in October 2023. The UK was a key market for CEX.IO, accounting for 69% of its European Economic Zone customer base before the suspension, with transaction volumes growing 26.9% quarter-over-quarter. CEX.IO, which has over 15 million users globally, aims to re-establish the UK as a major market, offering 190 digital resources to local clients.

The firm collaborated with FCA-authorized financial promotion approver Gateway 21 to encourage its return. CEX.IO UK Managing Director Rich Evans emphasized that compliance with lawful guidelines and client security remains a top priority, even at the price of business development. CEX.IO is still working towards getting an Anti-Money Laundering (AML) registration from the FCA, but presently, all services are being provided from Lithuania. This association with Gateway 21 mirrors the approach taken by crypto lender Nexo, which too resumed UK operations after securing a similar bargain. New UK regulations require crypto firms to actualize cool-off periods, risk warnings, investor categorization surveys, and appropriateness evaluations to guarantee client protection.

CEX.IO’s history dates back to its origins as the GHash.IO mining pool in 2013, a platform that collectively mined over 583,000 bitcoins. Be that as it may, concerns emerged within the crypto community when GHash.IO approached 51% of the Bitcoin network’s hash rate, raising fears of a potential “51% attack” that might compromise exchange integrity. These concerns led to the pool’s inevitable shutdown, as miners cleared out to reduce its dominance.

The FCA presented new rules for crypto asset financial promotions in October 2023 to make crypto promoting more straightforward and compliant. Failure to comply with these rules may result in criminal charges under the UK’s Financial Services and Markets Act 2000, culpable by up to two years in prison or an unlimited fine. The regulations aim to control illegal promotions, with over 450 alerts issued in 2023. Whereas firms like PayPal and Revolut struggled with these changes, others, including Coinbase, Binance, and OKX, turned to third-party providers for compliance to maintain a strategic distance from exiting the UK market altogether.

These improvements reflect a noteworthy move in the UK crypto market, where compliance with regulations is becoming a vital factor for firms operating in the space. CEX.IO’s return illustrates its commitment to following to the new rules, whereas other major players continue to alter their techniques to remain compliant and retain access to the UK market.