FCA work in review June 10 – 21, 2024

A suspected billion pound crypto scam, PEPS review delayed and whisky bonds galore in the latest roundup of FCA activity.

The FCA has removed the ability of Motmaen Limited to provide money transfer payment services. The regulator wants to see that all liabilities to customers have been repaid by May 22, 2024.

The action has been taken because of breaches of the Payment Services Regulations, details of which are set out in a supervisory notice issued on May 15, 2024.

Payment Services Regulations

An update on the activities of London Court limited has been issued after the regulator became aware of potential scamming. Investors holding Whisky Scotland bonds are apparently being approach held by people claiming they are able to help them recover investments.

The FCA advises investors to consult the ScamSmart section of its website.

Victims of convicted fraudster Ian Hudson have been urged to claim compensation by July 3, 2024.

Following Hudson’s conviction, the court secured a confiscation order of £220,710.14 ($279,513.94) and ordered that this be used to pay compensation.

Two people suspected of running an illegal cryptoasset exchange have been arrested by London’s Metropolitan Police, working alongside the FCA in an ongoing operation. The exchange is believed to have bought and sold more than £1 billion ($1.26 billion) in unregistered crypto assets.

Digital devices were seized from two London residential properties, and both suspects released on bail after being interviewed under caution.

Payment services firm LCC Trans-Sending Limited (LCC) has entered special administration under the Payment and Electronic Money Institution Insolvency Regulations 2021, with Christine Mary Laverty, Russell Simpson and Jarred Erceg of Grant Thornton UK LLP appointed as joint special administrators.

LCC entered special administration on 18 June 2024 and has now ceased trading.

Payment and Electronic Money Institution Insolvency Regulations 2021

PCF Bank Limited (PCF) and its subsidiaries PCF Credit Limited and Azule Limited have entered creditors’ voluntary liquidation, with Peter Dickens and Edward Macnamara of PricewaterhouseCoopers LLP (PwC) appointed joint liquidators.

Rules and consultations

The regulator was due to publish the findings of its review of the domestic Politically Exposed Persons (PEPs) regime by the end of June, but has decided it would be “inappropriate” to publish during an election campaign. Publication will now be in July, once Parliament has returned.

In an FCA first, the regulator built an experimental trading app platform to test the effectiveness of various digital engagement practices on consumers. The experiment involved over 9,000 consumers, and we reported the findings yesterday. Stock trading apps were warned to review game-like design features in 2022, before the introduction of the Consumer Duty.

Consumer Duty