UK financial regulator approves BlackRock's crypto asset firm registration, Galaxy Digital secures derivatives trading license

BlackRock received approval from the UK's Financial Conduct Authority to operate as a crypto asset firm in the country, while Galaxy Digital has been granted a license to execute derivatives trading through its London office.

Since 2020, firms conducting certain crypto asset activities in the UK have been required to comply with revised money laundering, terrorist financing and transfer of funds regulations and register with the FCA. A total of 51 firms are currently on the crypto asset register , including Coinbase, Fidelity, Gemini and Kraken, with the FCA's stringent approval process meaning that only around 14% of applications are granted.

BlackRock became the latest addition on Tuesday, permitted to arrange transactions and sales related to exchange-traded products issued by iShares Digital Assets AG, which are backed by crypto assets, the FCA stated , meaning it can roll out its new European spot Bitcoin ETP in the country.

However, in the UK, crypto-related ETPs are only accessible to institutional and professional investors and the FCA's current restrictions prevent retail investors from purchasing them on regulated markets.

BlackRock launched its iShares Bitcoin ETP in Europe earlier this month, marking its first crypto-backed product outside North America, following the success of its dominant U.S. spot Bitcoin ETF, IBIT.

The ETP was listed on Euronext Paris and Xetra Frankfurt under the ticker "IB1T" and Euronext Amsterdam as "BTCN," backed by bitcoin held via Coinbase Custody International in cold storage.

BlackRock's IBIT debuted in January 2024 and has generated over $40 billion in cumulative net inflows since, making it the largest among U.S. spot Bitcoin ETFs.

In his annual letter to investors on Monday, BlackRock CEO Larry Fink warned that if the U.S. doesn't get its debt under control and deficits keep ballooning, the country risks losing its world reserve currency status to digital assets like bitcoin.

Galaxy Digital secures FCA license to expand derivatives trading capabilities

Meanwhile, on Wednesday, fellow asset manager Galaxy Digital announced that the FCA has approved the application of its UK subsidiary for a license to execute derivatives trading through its London office.

Galaxy was already registered with the FCA for certain crypto asset activities since 2021. However, in addition to expanding its trading operations, Galaxy Investment Banking will also leverage the UK subsidiary's FCA license to offer capital raising and investment banking services. Galaxy Digital UK will also assist the Galaxy Asset Management business with fund distribution activities, according to the statement.

"Obtaining FCA authorisation is a pivotal achievement for the Galaxy group, as it allows us to deliver innovative trading solutions to institutional clients while maintaining the highest regulatory standards," Galaxy Europe CEO Leon Marshall said. "London is a critical financial hub, and this authorisation allows us to deepen our presence in the UK, aligning with our mission to bridge traditional finance with the digital asset ecosystem."

Galaxy argued that the FCA license also enhances its ability to meet the growing institutional demand for digital assets globally.

"The UK's approach to creating a stable and forward-thinking regulatory framework for crypto assets positions it as a leader in the global digital asset landscape," Marshall added. "With a strong focus on attracting innovation capital, the UK government has fostered an environment conducive to the growth of transformative technologies like digital assets. This clarity is drawing top talent, investment, and innovation to the region, bolstered by the nation's deep talent pool, world-class academic institutions and entrepreneurial spirit."