Crypto custodian Copper is reportedly struggling to close a $500m funding round after failing to secure approval from the UK’s financial watchdog.
Copper, a crypto custodian which is advised by the UK’s former chancellor Philip Hammond, remains on the FCA’s temporary register for digital asset service providers which required firms to secure full approval ahead of a key deadline last week. Uncertainty surrounding the regulation process has put off prospective investors including Accel Partners and Tiger Global, sources told Coindesk.
“Tiger, and presumably some of the other investors, had wanted to make the closing process tied to the FCA approval,” an insider said. “So some combination of downsizings or pulling out of the round happened with the investor consortium.”
Accel reportedly “walked away from the deal” while Tiger cut its intended investment to about a quarter of what was initially a nine figure deal, a second source told Coindesk.
Copper has over 400 institutional clients and said $50bn worth of capital flows through its custody infrastructure on a monthly basis.
The custodian is one of twelve crypto firms operating in the UK from the FCA’s temporary register, which includes industry heavyweights including Blockchain.com and Revolut. The regulator last week extended the temporary register while firms appeal the regulator’s decision or seek permissions elsewhere in Europe.
Copper has set up an entity in Switzerland which should allow the firm to continue serving UK customers. The firm told City A.M. that it is unable to comment on ongoing funding rounds when approached.