The Financial Conduct Authority (FCA) in the United Kingdom has granted MoonPay, a cryptocurrency payments app with a valuation of $3.4 billion, a regulatory license.
At this time, the FCA only has a limited amount of control over the cryptocurrency business; however, they anticipate being granted further authority if the Financial Services and Markets Bill is passed into law.
MoonPay completed one of the most significant investment rounds in the history of crypto assets in 2021. It was able to acquire $555 million in its Series A funding round, thanks to the participation of a number of prominent investors and celebrities such as Justin Bieber, Ashton Kutcher, and Gal Gadot.
Gemini, a cryptocurrency exchange; Bitpanda and eToro, trading platforms; and Revolut, a neobanking business are among the firms that are included on the very modest list of registered cryptocurrency enterprises.
Getting the regulator’s authorization to trade in cryptocurrencies is not a simple process, as verified by Sarah Pritchard, the Executive Director for Markets at the FCA. The majority of applications, close to 75 percent, are either turned down or withdrawn.
MoonPay is being sued for misleading people in its NFT promotion
The news about the FCA license comes as the crypto payments platform is in the middle of a lawsuit that accuses it and YugaLabs of misleadingly promoting NFTs.
In the lawsuit filed in the U.S. District Court for the Northern District of California, investors claim that Yuga Labs and MoonPay broke U.S. securities laws by offering unregistered securities to them and misleading them.
It references Yuga Labs’ advertising effort to sell NFTs, which included celebrities including Paris Hilton, The Weeknd, and Snoop Dogg.
The complaint goes on to claim that both Yuga Labs and MoonPay lied to customers about the nature and value of the NFTs they were selling.
The investors allege that Yuga Labs and MoonPay misrepresented the nature of the NFTs and their investment potential, as well as the costs involved with purchasing them.
It has also been claimed that Yuga Labs and MoonPay misled investors by concealing the identities of the celebrities whose likenesses appeared on the NFTs.
The lawsuit further claims they lost money due to the defendant’s false statements and are now suing for damages. Moreover, they want an injunction preventing Yuga Labs and MoonPay from selling any more unregistered securities.
Regulations for crypto under the Financial Services and Markets Act
The decision to regulate cryptocurrencies like other financial instruments under the Financial Services and Markets Bill was made by the lower house of the United Kingdom’s Parliament in October.
The measure that was voted on is still only a draft, and it has a long way to go through the administrative process before it becomes law. First, it has to be sanctioned by the upper chamber of the British Parliament, known as the House of Lords, and then it needs to be sanctioned by King Charles.
At first, the measure only guaranteed the right of financial oversight over stablecoins; however, revisions that were approved in October expanded the FCA’s authority to include all cryptocurrencies. Meanwhile, the European Union (EU) remains hard at work on the much-anticipated MiCA law.
Markets in Crypto-Assets (MiCA) legislation is a European Commission (EC) proposal for a groundbreaking licensing law that aims to preserve financial stability, safeguard investors, and hasten the development of the cryptocurrency industry throughout the EU.
The introduction of MiCA’s groundbreaking, all-encompassing laws into the cryptocurrency business will be a watershed moment.
Providers of digital wallets and other crypto services will be able to sell their wares throughout the EU bloc once the legislation goes into force, provided they register with national authorities and give certain minimal assurances to protect investors and maintain financial stability.