Copper Technologies, a leading cryptocurrency custody provider backed by Barclays investment, has withdrawn its application for a UK crypto license. The move underscores the challenges of navigating the UK’s stringent regulatory landscape for crypto businesses.
Copper’s Strategic Shift Away from the UK
The decision comes in response to increased scrutiny from the UK’s Financial Conduct Authority (FCA), which has rejected or refused most crypto license applications in the past year.
On December 20, 2024, Copper confirmed it would prioritize expanding into other key markets, including:
- United States
- Switzerland
- Middle East
This shift reflects Copper’s broader strategy to focus on jurisdictions with favorable regulatory frameworks, ensuring sustainable growth amid a challenging UK environment.
FCA Scrutiny Poses Significant Challenges
The FCA’s strict requirements for crypto licensing have posed major hurdles for firms operating in the UK. According to its 2024 annual report:
- Over 87% of crypto registration applications were withdrawn, rejected, or refused.
- The FCA cited poor anti-money laundering (AML) controls as the primary reason for the high failure rates.
In the past year, the FCA approved only four out of 35 applications, reflecting its cautious stance on cryptocurrency regulation.
Copper had previously struggled to secure permanent UK registration in 2022, prompting the firm to explore regulatory approvals in other jurisdictions.
Leadership Transition and Global Expansion
Copper’s decision to withdraw its UK application coincides with significant leadership changes. In October 2024, the company appointed Amar Kuchinad as its new global CEO following the resignation of founder Dmitry Tokarev.
Kuchinad emphasized the company’s focus on global growth, particularly in markets such as:
- Hong Kong
- Abu Dhabi
- Switzerland
He described the withdrawal as a strategic move to prioritize growth in regions with greater opportunities.
“Refining Copper’s global growth strategy has been my priority since joining, and this has necessitated key decisions on our direction and approach,” Kuchinad stated.
Copper’s Future Plans
Despite withdrawing from the UK licensing process, Copper remains committed to its home market and plans to maintain operations while exploring international opportunities.
The company aims to:
- Strengthen its presence in the United States and the Middle East.
- Expand its product portfolio to cater to global clients.
- Leverage its Barclays-backed financial resources to enhance its competitive edge.
Kuchinad reaffirmed Copper’s commitment to the UK:
“Withdrawing our application to register as a crypto asset institution in the UK is the right decision for our business and reflects our refocus on driving growth in priority markets and the expansion of our product portfolio.”
Adapting to Global Regulatory Trends
Copper’s decision reflects a broader trend in the cryptocurrency industry, where firms are adapting to regulatory challenges by focusing on regions with supportive frameworks.
The firm’s pivot towards international markets, particularly the Middle East and Switzerland, highlights its commitment to driving innovation and meeting the evolving needs of the global crypto ecosystem.
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