Why Crypto Regulation Will Bring More Legitimacy to this Volatile Sector

We sat down with our Chief Compliance Officer, Natasha Powell, to discuss BCB Group’s approach to compliance, the importance of horizon scanning and how crypto regulation is evolving in different jurisdictions.

You joined BCB Group in May 2022 to head up the compliance function. What are your key priorities?

Natasha: My main focus is to build resilience into our regulatory framework. We need to make sure we have a clearly defined risk appetite, and one that is agile in terms of our sector and the nature of our business. We build resilience by employing the right people (who are both crypto-minded and have Traditional Finance AML experience), by clearly defining our internal processes and making them ‘scaleable’, and by implementing the right Reg Tech – either through our own innovation or buying technology off-the-shelf.

By having all these areas covered we can operate more effectively. We can onboard clients more quickly and support different client activity in different segments. Ultimately, we can support our clients through the different stages of their AML journeys – some will have fully fledged AML frameworks while others may need help and direction to adhere to global requirements.

Regulation is possibly the single biggest trend for the crypto industry moving forward (strengthening of regulation, innovation in regulation). What is BCB Group doing to be part of this process?

Natasha: We want to be the spokespeople on behalf of the industry, supporting them in navigating an environment of increasingly stringent regulation. We want to be part of the dialogue which is shaping the industry. To do that, we need to have our own internal organisational standards as robust and streamlined as possible, and we need to have the right thought leaders working on these issues. At BCB Group, we have a wealth of expertise that is being fed into industry bodies as well as into regulators. We’re proactively pursuing every opportunity to help regulators understand our business and the business of our customers.

Lots of industry players see the emerging regulation as a threat. What is your view?

Natasha: As a former regulator I can say that regulation is primarily an opportunity. If done right, it creates transparency and enhanced stability in financial products that we can all interact with knowing their full risks and benefits. On the flip side, rarely do the regulators sing from the same hymn sheet. Diverging regulatory frameworks can pose a great challenge for businesses operating globally. What we need is regulation that is as homogenous as possible across the world.

Currently, there is a race to the start line. Regulators in the UK are somewhat behind the EU and the US, but they are making fast leaps and positive steps forward. I think we’re at least two years away from seeing meaningful crypto regulation in the UK while we will start to feel the impact of MiCA in the EU next year as firms ready themselves for implementation.

Regulation may be an opportunity for larger players with sizeable compliance teams but what about smaller businesses in the crypto market, how can they prepare and manage change?

Natasha: Certainly smaller businesses who aren’t set up for compliance are the ones who will feel the impact of regulation most. However, I remain a compliance optimist. Regulation isn’t going anywhere, indeed it will only intensify. It will bring more legitimacy to a sector that is perceived as volatile.

At BCB Group, we’re embracing this change, sharing our know-how and assisting our customers to help them prepare for the new regulatory environment. We play a central role in the crypto ecosystem and with this power comes a great responsibility to drive the industry forward in terms of compliance.

Natasha Powell, Chief Compliance Officer

Why Crypto Regulation Will Bring More Legitimacy to this Volatile Sector

BCB Group comprises BCB Prime Services Ltd (UK), BCB Payments Ltd (UK), BCB Digital Ltd (UK) and BCB Prime Services (Switzerland) LLC. BCB Payments Ltd is regulated by the Financial Conduct Authority, no. 807377, under the Payment Services Regulations 2017 as an Authorised Payment Institution. BCB Prime Services (Switzerland) LLC, a company incorporated under the laws of the Swiss Confederation in the canton of Neuchâtel with business identification number CHE-415.135.958, is an SRO member of VQF, an officially recognized self-regulatory organization (SRO) according to the Swiss Anti-Money Laundering Act. This update: 14 Oct 2020.

The information contained in this document should not be relied upon by investors or any other persons to make financial decisions. It is gathered from various sources and should not be construed as guidance. The information contained herein is for informational purposes only and should not be construed as an offer, solicitation of an offer, or an inducement to buy or sell digital assets or any equivalents or any security or investment product of any kind either generally or in any jurisdiction where the offer or sale is not permitted. The views expressed in this document about the markets, market participants and/or digital assets accurately reflect the views of BCB Group. While opinions stated are honestly held, they are not guarantees, should not be relied on and are subject to change. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This document may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Past performance of the digital asset markets or markets in their derivative instruments is not a viable indication of future performance with actual results possibly differing materially from those stated herein. We will not be responsible for any losses incurred by a client as a result of decisions made based on any information provided.

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