On 17 February 2022, the Upper Tribunal published its decision in Gidiplus v FCA. The decision rejected an application from a cryptoasset exchange provider, by which the applicant sought to suspend the effect of a decision notice issued by the Financial Conduct Authority.
The applicant had applied to the FCA to be registered under the Money Laundering Regulations. It operated ‘crypto ATMs’, which allowed individuals to convert cash into Bitcoin. The applicant is now challenging before the Upper Tribunal the FCA’s decision notice, by which the FCA had rejected the application for registration. It is the first FCA decision in relation to a cryptoasset firm to be so referred.
Whilst this was not a hearing of the merits, Judge Herrington’s judgment commented on a number of issues arising out of the FCA’s decision. He concluded that the applicant had a case to answer, both in relation to the applicant’s director having misled banks as to the nature of the applicant’s business, and in relation to risks of money laundering at the applicant firm. Judge Herrington also found that the evidence produced by the applicant did not show that the applicant had implemented its own remediation plan, meaning that the Upper Tribunal could not be satisfied that the applicant would carry out its business in a broadly compliant manner, if the decision were to be suspended.
Adam Temple acted for the FCA, successfully opposing the application.
The judgment can be downloaded here.