BCB Group Faced and Survived a UK FCA Investigation

New information has revealed that Europe's leading payment service provider BCB Group once fell under the UK Financial Conduct Authority (FCA)'s radar.

Europe’s leading payment service provider BCB Group was once in the UK Financial Conduct Authority’s (FCA) crosshairs, but the investigation concluded a while back.

On Monday, two individuals familiar with the matter told the Financial Times that the crypto payment processor received a Section 166 (s166) notice from the FCA in 2023. This kicked off the U.K. regulator’s investigation into BCB Group.

While many details were not provided about the context of the investigation, the FCA usually commissions an s166 notice when it is concerned about aspects of a regulated firm’s activities and wants further investigation.

The regulator could be concerned about the company’s regulatory requirements and whether it complies with specific rules. The FCA may also suspect potential misconduct issues, BCB Group’s risk management processes, financial stability, or even market abuse or misconduct.

Another source close to the financial firm said the investigation ultimately favored BCB Group in the long run. The firm is in constructive talks with the regulator, seeking strategies and authorization to expand its regional license.

However, one key detail stood out: BCB Group is among the few crypto payment processors that serve top crypto exchanges. Some beneficiaries of its traditional banking services are Crypto.com, Bitstamp, Kraken, and Gemini.

The role of companies like BCB Group became prominent after the collapse of Signature Bank and Silicon Valley Bank in 2022. Some crypto exchanges were forced to halt wire transfers or reduce maximum withdrawal limits.

Meanwhile, the FCA has become quite tough with its regulation, causing many crypto firms to pursue business in other regions. Over a year ago, the crypto exchange Bybit announced its decision to suspend operations in the U.K. As an exchange not listed on the FCA’s crypto register, Bybit was rendered ineligible to continue its advertising and promotional activities in the country.

“We have regular open and transparent dialogue with all our regulators across our licensed businesses and from our perspective we are in good standing with them all,” said Oliver Tonkin, CEO of BCB Group, in a statement to the Financial Times. “Our engagement with the FCA continues to be positive and we have recently been given the green light to expand our regulatory footprint in the UK should we wish to do so.”

Ultimately, BCB intends to diversify its portfolio of regulatory licenses and approvals outside the European Economic Area (EMI).

Recently, BCB Group secured regulatory approval from Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR) of France. The Electronic Money Institution (EMI) and Digital Assets Services Provider (DASP) license gave BCB Group the legal right to enter the country and offer its products to customers in the region.