PayPal will reportedly place a temporary halt on cryptocurrency sales for its U.K. customers starting from October.
This decision comes as the company aims to comply with new regulations on crypto promotions set by Britain’s financial regulator, Reuters reported Wednesday (Aug. 16).
Reached for comment by PYMNTS, a PayPal spokesperson said in an email that the company is temporarily pausing the ability of U.K. customers to buy crypto through PayPal as it works to satisfy new regulatory requirements.
“PayPal customers who currently hold crypto can keep it on our platform at no charge and are also able to sell their currency at any time,” the email said. “We remain deeply committed to our compliance obligations, and PayPal works closely with regulators around the world to adhere to applicable rules and regulations in the markets in which we operate.”
The U.K.’s Financial Conduct Authority (FCA) recently introduced rules to limit how cryptocurrencies are advertised to British consumers, according to the Reuters report. These rules include requirements for crypto firms to provide warnings about the risks involved and to eliminate “refer a friend” bonuses.
In response, PayPal will pause the ability for customers in the country to buy cryptocurrencies on its platform from Oct. 1, with plans to resume in early 2024, the report said, citing an email that PayPal sent to its customers.
PayPal first introduced the option to buy and sell cryptocurrencies in the U.K. in 2021. However, as regulators worldwide increasingly seek to regulate crypto assets, PayPal’s decision to comply with the new rules in the U.K. reflects the growing scrutiny and efforts to protect consumers in the crypto space.
The collapse of several crypto firms, including FTX, last year led to significant losses for amateur investors, prompting regulators to take action to prevent such incidents from recurring.
The FCA unveiled what it calls “tough rules” for crypto marketing on June 8, saying the package of measures is designed to ensure those who buy crypto understand the risk.
Among the new measures are the ban on “refer a friend” bonuses, as well as a requirement that companies marketing crypto assets to consumers in the U.K. will need to introduce a “cooling off” period for new investors beginning Oct. 8.
“It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision,” Sheldon Mills, the FCA’s executive director for consumers and competition, said at the time.
