Crypto Payment Company BCB Group Subject to FCA Investigation

BCB Group, the payments provider that connects cryptocurrency firms to the banking system, is the subject of a (now closed) investigation by the UK financial services regulator, according to two people with knowledge of the matter.

The Financial Conduct Authority (FCA) served a s166 notice on BCB late last year. The investigation has since concluded in what a source close to BCB described as “positive for the company”. BCB is in constructive discussions with the regulator about expanding its licence, a third person added.

“BCB Group has always applied a compliance-first approach to its business operations and continues to do so,” said BCB CEO Oliver Tonkin. “We have a regular, open and transparent dialogue with all our regulators across our licensed businesses and, from our perspective, we are in good standing with all of them. Our relationship with the FCA remains positive and we have recently been given the green light to expand our operations in the UK should we wish to do so.”

The FCA declined to comment on the matter.

Payments companies like BCB have become important intermediaries in the digital asset ecosystem following the collapse of a number of crypto-friendly banks in the US last year. These companies provide banking services to some of the largest institutions in the digital asset industry, including exchanges such as Bitstamp, Crypto.com, Gemini and Kraken.

It is not yet clear what kind of investigation BCB faces. The s166 review may have been sent out by the FCA for a variety of reasons, there may be concerns about the company’s legal requirements and whether it complies with certain rules. At the same time, the regulator may also be concerned about abuse issues. The FCA may launch an investigation if it suspects market abuse or exploitation.

BCB’s former chief compliance officer, Natasha Powell, recently resigned. He will join crypto exchange Kraken as UK head of compliance in November.

Powell will continue to maintain links with BCB and will continue to support the group as one of the directors of UK-regulated BCB Payments Ltd.