FCA Approves Genesis Custody as Registered Crypto Firm
The Financial Conduct Authority (FCA) has approved London-based Genesis Custody Limited as a registered cryptoasset business, according to a press statement published on Monday. This makes the firm, a subsidiary
The Financial Conduct Authority (FCA) has approved London-based Genesis Custody Limited as a registered cryptoasset business, according to a press statement published on Monday.
This makes the firm, a subsidiary of cryptocurrency trader and lender Genesis Global Trading, among the first crypto custody providers to have fully registered with the UK’s financial regulator.
Genesis acknowledged the importance of having their custody business regulated, noting that the move opens up its prime brokerage to more institutional investors and is key to making the market more inclusive.
Genesis Custody now joins a small group of cryptocurrency exchanges, brokerage firms and crypto-focused businesses that have secured the City watchdog’s seal of approval. These firms and providers have the licence to operate within the UK market, with oversight from the FCA.
Before receiving the regulatory nod, Genesis was among several crypto-asset firms to appear on the FCA’s list of companies operating under the temporary registration regime (TRR). This temporary registration status is the country’s nod to cryptocurrency firms, allowing them to operate as the FCA finalises assessment of applications.
The FCA doesn’t consider cryptocurrencies themselves regulated assets, but derivatives on the back of them fall under its powers of oversight.
In June, the regulator extended the timeline within which firms could continue to operate within the TRR agreement, moving the deadline to March 2022. However, nearly 70 crypto businesses had withdrawn earlier submitted filings for registration as the country tightens its regulation on the space.
Genesis grows its ecosystem
Genesis is a full-service cryptocurrency prime broker that provides investors with a marketplace to trade, borrow, lend and custody digital assets.
“This is an important milestone in our strategy to deliver to institutional clients cryptocurrency services that are compliant with the regulatory framework. This approval also reflects our commitment to working with regulators ー at the FCA and elsewhere ー as this asset class evolves. We will continue to do so as we expand our services in the coming months,” said Arianna Pretto-Sakmann, General Counsel at Genesis.
Genesis primarily lends to institutional borrowers, such as hedge funds and trading firms looking for arbitrage, mainly to short crypto. Since the launch of the business two years ago, the startup originated nearly $10 billion in crypto loans, the bulk of which are denominated in bitcoin and cash. The amount of interest paid on crypto accounts often vary by several parameters, which the client can tweak to potentially receive a premium in US dollars on his Bitcoin holdings.
Moreover, Genesis is an exclusive distribution agent for Grayscale investments products and the company’s crypto suite includes digital asset trading, institutional lending, custody and prime brokerage services.
Furthermore, the company’s derivatives trading desk, which was launched in May 2020, is a principal liquidity provider and trade both cleared and bilateral OTC derivatives in options and forwards.
Reporting by Abdelaziz Fathi. Filed 13 December 2021, 17:03 GMT.
Senior Reporter, Brokers and Prop Firms
Abdelaziz Fathi covers the intersection of forex/CFD brokerage, regulation, liquidity, fintech, and digital assets.
