BlackRock and Galaxy Digital Receive UK Regulatory Approvals for Crypto Operations
The UK's Financial Conduct Authority (FCA) has approved BlackRock to operate as a crypto asset firm in the country. This approval allows BlackRock to arrange transactions and sales related to exchange-traded products issued by iShares Digital Assets AG, which are backed by crypto assets.
The approval enables BlackRock to roll out its new European spot Bitcoin ETP in the UK, though these products remain accessible only to institutional and professional investors. Current FCA restrictions prevent retail investors from purchasing crypto-related ETPs on regulated markets.
BlackRock launched its iShares Bitcoin ETP in Europe earlier this month, its first crypto-backed product outside North America. The ETP was listed on Euronext Paris and Xetra Frankfurt under the ticker "IB1T" and on Euronext Amsterdam as "BTCN," with bitcoin held via Coinbase Custody International in cold storage.
The Switzerland-domiciled product expands BlackRock's cryptocurrency footprint after attracting more than $50 billion into similar products in the United States. Coinbase serves as custodian while Bank of New York Mellon functions as administrator for the European bitcoin product.
Since its January 2024 debut, BlackRock's U.S. spot Bitcoin ETF (IBIT) has generated over $40 billion in cumulative net inflows, making it the largest among U.S. spot Bitcoin ETFs. BlackRock CEO Larry Fink recently warned that the U.S. risks losing its world reserve currency status to digital assets like bitcoin if it doesn't control its debt.
Separately, Galaxy Digital announced on Wednesday that the FCA has approved its UK subsidiary to execute derivatives trading through its London office. The company will also:
- Offer capital raising and investment banking services
- Assist with fund distribution activities
- Deliver trading solutions to institutional clients
Galaxy Digital has been registered with the FCA for certain crypto asset activities since 2021. The new license enhances its ability to meet growing institutional demand for digital assets globally.
Since 2020, firms conducting crypto asset activities in the UK must comply with revised money laundering and terrorist financing regulations and register with the FCA. Currently, 51 firms are on the crypto asset register, including Coinbase, Fidelity, Gemini and Kraken, with only about 14% of applications receiving approval.
