Adam Temple represents the FCA in third cryptoasset case
The Upper Tribunal has published three separate decisions in Moneybrain Limited v FCA. This is the third case before the Upper Tribunal concerning cryptoasset exchange providers (see our news articles on the first two cases, both involving Adam Temple of 3VB for the FCA: Gidiplus v FCA and Vladimir Consulting v FCA).
Moneybrain raises different issues than the earlier cases, relating to the probity of the firm in light of promotional statements used by the firm to promote its cryptocurrency, known as the ‘BiPS token’. The FCA concluded that the statements were misleading, because they referred to the tokens as ‘asset-backed’ when, in fact, assets were to be held by another company and the holders of the tokens had no claim to the assets. On the basis of a lack of probity, the FCA refused Moneybrain’s application for registration under the Money Laundering Regulations and issued a decision notice to that effect.
Moneybrain applied to the Upper Tribunal to suspend the effect of the decision notice. The Upper Tribunal rejected that application, holding that the firm had a case to answer on the FCA’s findings and that the firm had failed to demonstrate that the interests of consumers would not be prejudiced if the firm were to resume operations in the UK.
The judgment is not a final decision on the merits, but will be of interest to practitioners on the FCA’s approach to probity under the Money Laundering Regulations, in respect of the promotion of cryptocurrencies (which are not themselves regulated products).
Following the suspension decision, the firm applied for the Judge to recuse herself, based on statements made within the suspension decision. That application was dismissed by the Upper Tribunal.
The Firm also applied to prevent immediate publication of the suspension decision, arguing that it would be damaging and unfair for it to be published. This led to a third judgment from the Upper Tribunal, dismissing the application, subject to the decision remaining confidential pending any application for permission to appeal.
Adam Temple acted for the FCA.
Read the suspension judgment; the recusal judgment; and the privacy judgment.
