Coinbase’s UK chief executive says sweeping new Financial Conduct Authority rules will force non-compliant crypto firms out of the British market entirely.
Keith Grose, UK chief executive of Coinbase, argued that the FCA’s newly outlined regulations will raise consumer confidence by removing firms unwilling to meet compliance standards.
“It will wipe out people that don’t want to focus on compliance. That’s going to be a no-go now in the UK,” Grose told City AM in an interview.
The FCA unveiled what it described as a “landmark” overhaul of the crypto market, requiring companies to win regulatory approval before dealing with British customers.
Under the new framework, crypto platforms must hold a full financial licence, known as the FSMA Part 4A Permission, to conduct business with UK clients from October 2027.
All firms must also meet stronger resilience standards and will face capital and stress testing to ensure they can withstand significant market shocks.
The watchdog has additionally introduced a new industry-led framework specifically designed to detect and prevent market manipulation, insider trading, and illicit financial activity.
Platforms that fail to obtain the required licence or refuse to comply with the new rules face being removed from the market completely.
Around eight per cent of UK adults currently hold cryptocurrency, representing approximately 4.5 million people, according to the latest FCA figures.
Grose argued that stricter oversight would help legitimise the sector among consumers who remain sceptical, saying: “It builds confidence in our overall system and security. They know I can go to the financial ombudsman if something goes wrong.”
The Coinbase UK boss also welcomed the return of Lucy Rigby as City minister, reflecting the broader fintech sector’s view that she “gets” the importance of these companies in driving economic growth.
Prime minister Andy Burnham is yet to firmly cement his position on digital assets, though he previously voiced support when Coinbase’s policy team met him during his time as mayor of Greater Manchester.
Grose said of Burnham: “He gets that digital assets are an important part of innovation. I’m not saying he’s deep in this ecosystem, but I think he is supportive.”
Grose urged both ministers to build on progress made under the previous Starmer government, warning that the US remains a serious competitor in attracting fintech companies.
In a separate development, Coinbase has been granted FCA authorisation to offer traditional financial instruments, including equities and commodities, on its platform.
The approval comes as Coinbase continues to face headwinds, with its stock down 30.8 per cent year to date, trading at $163.
Founder and chief executive Brian Armstrong announced plans in April to cut 14 per cent of the company’s global workforce in a bid to reduce costs.
Grose said the regulatory “stamp of approval” would allow Coinbase to compete directly with established providers and expand its capabilities well beyond the crypto market.
The new licence puts Coinbase in direct competition with platforms such as AJ Bell and IG, both of which are already offering crypto assets to retain their existing customer bases.
“You’re heading into this world where everyone is trying to compete to be the primary financial account,” Grose said, adding: “Certainly it will be more competitive.”