Bitcoin exchanges ask UK regulator for approval

LEADING Bitcoin exchanges are campaigning for the City regulator to bring the fast-growing virtual currency within its remit, City A.M. has learnt.

The companies want the Financial Conduct Authority (FCA) to give them the same approved status as other firms in the financial services sector – a move which the exchanges believe will help them build trust with the public.

But the FCA has yet to approve a licence for a Bitcoin exchange on the basis that it is not within its powers to regulate businesses associated with the decentralised currency.

Exchanges enable users to purchase and trade the virtual currency using more traditional forms of payment.

“We have hired a company to have the dialogue with the FCA,” said Nejc Kodric, chief executive of Bitstamp, the world’s second largest Bitcoin exchange by volume.

“We have an open dialogue and have got an opinion from [the FCA] – and that opinion is that they cannot do anything right now.”

Kodric, who yesterday attended the Bitcoin London conference in Canary Wharf, is in the process of moving his business from his native Slovenia to the UK and said the British regulator is considering its next move. “The FCA understands Bitcoin and has looked at it. But they are still deciding how to approach it and how to define it. So we adopt the principles and self-regulate.”

His comments were echoed by Tom Robinson of UK start-up Bitprice, which is aiming to become the first FCA-approved Bitcoin exchange in the UK.

“If you go to them with a business model they will give you advice. They’re still waiting to see how big virtual currencies are going to be. Based on the advice they have given us we feel we’ve complied with what they need.”

The FCA declined to comment.

Elsewhere at the event, attendees were able to test the world’s first Bitcoin cash deposit machine, which turned sterling notes into Bitcoin.