The Financial Conduct Authority (FCA) has issued a warning regarding Dragonfly Capital Fx, which is reportedly offering financial and crypto-related services without proper authorization.
According to the FCA, Dragonfly Capital Fx may be providing or promoting financial services in the UK without the necessary authorization. The firm is not authorized and could potentially be targeting UK consumers. It lists contact addresses in St. Vincent and the Grenadines, South Africa, and Seychelles. Engaging with this firm means consumers will not have access to the Financial Ombudsman Service or protection under the Financial Services Compensation Scheme, thereby increasing the risk of financial loss.
UK businesses dealing with cryptoassets are required to register with the FCA under the Money Laundering Regulations if they intend to offer services that fall within those rules. This requirement applies even to firms already authorized for other financial services. Registration involves submitting an application through the FCA’s Connect system, paying applicable fees, and providing detailed information about the business, its activities, and key individuals. All officers, managers, and beneficial owners must pass a “fit and proper” assessment. The FCA evaluates past convictions, regulatory compliance, and business conduct during this process. Misleading or incomplete applications may be rejected.
In a related press release by the FCA, CB Payments Limited (CBPL), part of the Coinbase Group, was fined £3.5 million for allowing 13,416 high-risk customers to access crypto trading through other Coinbase entities despite restrictions. This resulted in $226 million in transactions. The FCA attributed this to inadequate controls that increased money laundering risks. This marks the first enforcement action under the Electronic Money Regulations 2011.
Learn Signal reports that the FCA was established on April 1, 2013, succeeding the Financial Services Authority (FSA) as part of a comprehensive reform of the UK’s financial regulatory framework following the global financial crisis. Operating independently of the UK government, it is funded by fees charged to the financial services industry. Its primary objectives include protecting consumers, ensuring market integrity in UK finance markets, and promoting effective competition in consumer interests.
