Komainu registers with the UK Financial Conduct Authority

Komainu is a collaborative venture involving Nomura, Ledger, and CoinShares in the cryptocurrency custody sector. The company's registration with the FCA was finalised on 6 October 2023, just prior to the commencement of the FCA's updated regulations regarding promotions during the weekend. These new regulations necessitate that firms seeking to approve their own advertisements and communicate appropriate risk warnings to users must be registered within the UK. Non-compliance with these regulations could result in penalties, including imprisonment for up to two years. 

According to ledgerinsights.com, in 2021, Komainu raised a USD 25 million Series A funding round backed by Elwood. Another institution-backed digital asset custody firm active in the UK is Zodia Custody, backed by Standard Chartered, Northern Trust and Japan’s SBI. 

Crypto companies that are registered with the FCA are obligated to adhere to the anti-money laundering regulations of the United Kingdom. At the time of writing, there are 42 firms listed on the FCA register according to coindesk.com. However, it is noteworthy that at the start of the year, the regulator reported having received approximately 300 applications from firms since the introduction of the registration framework in 2021. 

In response to the updated advertising regulations, some unregistered companies have taken measures such as withdrawing specific services or discontinuing their services for certain clients. Meanwhile, others, including Binance, have opted to rely on third-party companies for the approval of their advertisements. Furthermore, OKX has announced adjustments, such as a reduction in its token offerings within the country. 

The FCA promptly updated its list of unauthorised firms by adding over 100 companies to its warning list, which includes entities such as KuCoin and Huobi.

The FCA has issued more than 100 notifications so far

Just 24 hours into the new crypto marketing regime, the FCA has issued 146 new alerts concerning promotional activities related to crypto assets. It is anticipated that various entities, including but not limited to social media platforms, app stores, search engines, domain name registrars, and payment service providers, will duly acknowledge these alerts and contribute to safeguarding the interests of consumers within the United Kingdom by preventing any illicit promotions. 

The FCA reiterated that the purchase of crypto assets remains a high-risk endeavour, and individuals should be prepared for the possibility of losing their entire investment.