PayPal, the online payment giant, has announced that it will temporarily stop selling cryptocurrencies to its customers in the United Kingdom from October 1st. The decision comes as a response to the changing regulatory environment in the UK, which has been tightening its rules on crypto activities.
According to PayPal, the suspension is a precautionary measure to ensure compliance with local regulations and to protect its users from potential risks and uncertainties. The company said that it will resume its crypto services once the regulatory landscape is clearer and more stable.
The UK’s Financial Conduct Authority (FCA) has been active in regulating the crypto sector, aiming to bring more clarity and security to the industry. The FCA has imposed stricter requirements on crypto firms, such as registering with the authority, conducting due diligence on customers, and reporting suspicious transactions. The FCA has also warned consumers of the high risks and volatility associated with digital assets.
Meanwhile, in the US, PayPal faces another challenge from the Federal Reserve, which recently issued a supervisory letter to banks that are involved or interested in crypto-related businesses. The letter reminded the banks of their obligations and responsibilities when dealing with crypto entities, and stated that they need to obtain permission from the Fed before engaging in such activities.
PayPal launched its crypto service in the US in October 2020, allowing its users to buy, sell, and hold four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The service was later expanded to the UK in August 2021, making it the first international market for PayPal’s crypto offering. However, the service has now been put on hold until further notice.