Crypto lending and borrowing platform Celsius has announced that it will cease operations in the United Kingdom, owing to the ongoing regulatory uncertainty. The news followed the fresh warning from the Financial Conduct Authority (FCA), which cited 111 crypto firms doing business without registration.
The team behind the platform revealed that its decision was driven by the state of regulatory affairs around the crypto industry. According to Celsius, the “increased regulatory uncertainty” coupled with the recent developments in the industry have prompted the firm to evaluate its options.
Celsius also indicated that it will eventually migrate its operations to the US, however, it hasn’t specified a location as of yet.
Founded in 2017, Celsius is a banking and financial services app, which allows users to receive up to 13% interest on their holdings. The interest rate is even higher if investors choose to collect their earnings in the platform’s native token CEL. While the company operates like a typical bank, its services aren’t safeguarded by a government agency or private insurance.
As per the company’s blog post, it has decided to withdraw its application for temporary registration with the FCA. The financial regulator had made it mandatory for crypto firms to obtain registrations until January 2021. But the pandemic and a backlog of applications impelled the regulator to reconsider the deadline and create a Temporary Registration Regime(TRR).
In the meantime, Celsius said that it has decided to shift its focus on "securing licenses and registrations in the U.S. and other jurisdictions that will ensure the long-term viability of Celsius and its community."
In addition to withdrawing its application from the FCA, the company will no longer register new users from the UK. Although, pre-existing users can continue to use the application’s services.
Celsius is expected to update its website to reflect its policy changes and the transition to the US. The company stated that its users will be required to approve a new set of terms and conditions before they continue to use the platform.
As of yesterday, the FCA has reiterated its stance on the registration of crypto businesses, with the head of oversight emphasizing that there are 111 companies in the domain that “are clearly doing business in the UK without being registered.”