Buy Bitcoin & Crypto in the UK

Bitcoin & Cryptocurrency Trading in the UK

The UK’s capital, London, is one of the largest financial centres worldwide. It's not surprising that fintech adoption in the nation remains robust with both Deloitte and EY ranking London as a leading global hub for financial technology.

Bitcoin Awareness and Adoption in the UK

• 93% of UK individuals have heard of Bitcoin, according to a recent YouGov survey.
• Nearly 25% claim to understand Bitcoin "quite well".
• Only 4% have made a Bitcoin purchase.
• UK regulatory environment is increasingly becoming favourable for crypto.

In October 2022, a landmark decision was made by UK lawmakers to recognise crypto assets as regulated financial instruments. Andrew Griffith, a prominent financial authority, stressed the aim is to treat cryptocurrencies similarly to other financial assets, officially integrating them into the regulatory framework.

In a significant development in August 2021, PayPal launched its cryptocurrency services in the UK, allowing users to buy, hold, and sell major cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. However, it's vital to recognise that cryptocurrency assets in PayPal cannot be transferred to an external wallet but can only be kept or sold within the app.

Purchasing Bitcoin in the UK

• Several cryptocurrency exchanges offer Bitcoin in the UK, each with its distinct set of fees, limits, and verification methods.
• It's recommended for Bitcoin buyers to have a personal wallet, especially for security reasons.
• Automated teller machines (ATMs) offer an immediate method for Bitcoin purchases, typically only requiring a phone number for verification. A useful Bitcoin ATM Map can guide users to the closest locations.

Exchange Hacks and Crypto Scams in United Kingdom

Crypto exchange based in UK gets hacked

At the end of 2020, cryptocurrency exchange EXMO was hacked, losing 5% of its assets held in its hot wallets (worth $4M USD). After the exchange platform noticed massive withdrawals of Bitcoins and five other cryptocurrencies, it suspended all transactions until further notice. EXMO also assured its users that they would be compensated for the financial losses from its own insurance funds.

EXMO representatives declared they were also conducting an investigation, in addition to the one conducted by the police.

This story is still developing, so check back regularly for updates.

Impact of Brexit on Bitcoin

• Boost in Bitcoin Demand: Britain's exit from the EU may increase Bitcoin demand.
• Why? Bitcoin is a borderless digital currency, aiding in payments and as a hedge during a “hard” Brexit.
• Warning from Bank of England: Governor Mark Carney says the pound could lose 25% of its value with a no-deal Brexit.
• Rise in Alternative Currencies: This potential devaluation sparks interest in Bitcoin, not controlled by governments.
• Binance in Jersey: The crypto exchange has seen a surge in registrations, enabling pound and euro trades with Bitcoin.

The overall health of Bitcoin in the U.K. appears positive due to the reasons above.

Latest UK Bitcoin News

Chase Bank Bans Crypto Transactions

• Chase to halt crypto payments for U.K. customers from Oct. 16.
• Payments via debit cards and outgoing bank transfers to be affected.
• Chase's reason: surge in crypto-related scams targeting consumers.
• Customers advised to use other banks for crypto investments.

Chase sent out emails to customers highlighting its concerns about increasing fraud with crypto assets. It emphasized its dedication to keeping their clients' money safe.

Finding a crypto-friendly bank in the U.K. might be challenging due to historical restrictions by credit institutions. The Financial Conduct Authority (FCA) has even mediated discussions between banks and crypto entities, recognizing the hesitance of banks to serve this sector.

Chase's move mirrors other U.K. banks that have introduced similar limitations, all citing concerns over potential scams and fraudulent activities.

New UK Regulations for Exchanges

• New rules coming on Oct. 8 require crypto firms to add clear risk labels and make significant system changes.
• Some firms, including Bybit and Luno, are suspending services in the U.K. to ensure compliance.
• PayPal is also pausing certain crypto services until compliant with these regulations.
• Only firms registered with the Financial Conduct Authority (FCA) can authorize their own promotions.

Crypto companies are gearing up for stringent U.K. advertising regulations. Though they can temporarily authorize their own promotions, this power is limited to firms registered with the FCA as virtual asset service providers. Furthermore, the rules necessitate significant online platform alterations to caution potential investors of risks.

Unregistered firms are making changes: ByBit is ceasing services to U.K. clients by the effective date, while Luno is restricting certain U.K. clients from crypto investments. Additionally, the FCA has provided an option for firms to request a three-month extension to implement the required adjustments. However, there's concern about overseas companies' willingness to comply with this new regime.

The guidelines demand that any communication that could be seen as an invitation or inducement to invest in crypto assets must comply. For many online-based crypto companies, this translates to substantial website changes and addressing challenges like implementing a 24-hour cooling period for first-time buyers.

Introduction of the UK’s Travel Rule for Crypto

The Travel Rule for crypto in the United Kingdom has been initiated on Sept. 1, aiming to regulate crypto transfers and prevent money laundering and terrorist financing activities on blockchain platforms.

• The Financial Conduct Authority (FCA) unveiled these regulations on Aug. 17, mandating Virtual Asset Service Providers (VASPs) in the U.K. to "collect, verify and share information" associated with crypto transfers.
• Should a VASP receive an inbound payment from a non-compliant overseas entity, they are required to conduct a "risk-based assessment" to decide if the assets should be made available to the recipient.
• The rule is applicable for U.K. residents wishing to make outbound payments as well.
• Originally crafted by the UN's Financial Action Task Force (FATF) in June 2019, the U.K. legislated its enforcement in July 2022.
• Countries like the U.S., Germany, Japan, Singapore, Switzerland, and others have also adopted the Travel Rule as per Sygna.io.

However, on June 23, FATF criticized its members for inadequate rule implementation. By March 2022, only 29 out of 98 jurisdictions met the required standards, with just a fraction starting enforcement. Ian Andrews of Chainalysis highlighted the initial challenges of coordinating information exchange between VASPs across borders.