Luna, a subsidiary of Digital Currency Group (DCG), has announced that it will be pausing certain crypto trading services in the U.K. This decision comes in response to new rules set by the U.K.’s Financial Conduct Authority (FCA), which will impose strict restrictions on how cryptocurrency companies can advertise their services. As a result of these regulations, Luna will no longer be able to offer crypto referral programs, and will have to halt some trading features by October 6th.
According to an email sent to users, Luno will temporarily pause buying and trading services. However, users will still be able to sell and withdraw their funds during this period. It is unclear which customers will be affected by the service pause, as Luno’s head of public policy, Nick Taylor, did not provide specific details. Taylor did mention that Luno plans to reintroduce U.K. services at a later date, and this will be done through a phased approach.
This decision by Luna to pause certain services follows financial difficulties faced by other subsidiaries of Digital Currency Group. Gemini’s lending arm is currently undergoing bankruptcy proceedings and owes $3.5 billion to creditors. Additionally, DCG’s wealth management subsidiary, HQ Digital, shut down earlier this year. These concerns are primarily related to liquidity issues that have affected crypto firms in the United States.
Unlike the financial difficulties faced by Gemini and HQ Digital, Luna’s decision to pause certain services in the U.K. is directly tied to regulatory changes imposed by the FCA. These changes have the potential to reshape the crypto market in the U.K. and have already prompted other companies to reduce their services. PayPal, for example, has announced that it will restrict its crypto services in the U.K. starting in October, in response to upcoming regulatory charges. Similarly to Luna, PayPal will block U.K. users from buying and selling crypto but will allow them to continue holding and selling.
Another notable company that has withdrawn from the U.K. is Binance, although the reasons behind this decision are less clear. It is uncertain whether Binance’s withdrawal was solely due to the upcoming regulatory changes or if it was influenced by general regulatory difficulties. Nevertheless, the departure of Binance highlights the challenges faced by crypto companies in the U.K.
Luna’s decision to pause certain services in the U.K. is a direct response to the new regulatory changes imposed by the FCA. These changes, along with similar restrictions imposed on other companies like PayPal, have a significant impact on the crypto market in the U.K. It remains to be seen how these regulatory changes will reshape the landscape of crypto trading in the country, and how companies like Luna will adapt and reintroduce their services in the future.
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