10:52:06 EST Sat 26 Nov 2022
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Globalblock Digital Asset Trading Ltd
Symbol BLOK
Shares Issued 104,948,741
Close 2022-02-25 C$ 0.60
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Globalblock U.K. receives warning notice from FCA

2022-02-25 17:20 ET - News Release

Mr. Rufus Round reports


Globalblock Digital Asset Trading Ltd. has provided the following update on the pending application by the company's wholly owned United Kingdom subsidiary, Globalblock Ltd., for registration as a crypto asset business with the Financial Conduct Authority in the United Kingdom in accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (information on the payer) Regulations 2017. Globalblock U.K. filed its application on June 30, 2020, and has, since that date, been operating under the transitional provisions of the MLRs and the temporary registration regime established by the FCA. That temporary registration regime is currently scheduled to expire on March 31, 2022.

After nearly 20 months of limited feedback from the FCA in respect of the application, Globalblock U.K. has now received a warning notice from the FCA, indicating that it is minded to refuse the application. While the company continues to analyze the reasons set forth by the FCA in its warning, the FCA reasoning appears to be that, based on its review of a limited number of transactions that took place prior to the company acquiring Globalblock U.K. in July, 2021, and that because of that review, the FCA suspects that Globalblock U.K. will fail to comply with its obligations under the MLRs.

The company strongly disagrees with the concerns and conclusions raised by the FCA and firmly asserts that its procedures are in line with the MLRs. The next step in the process is that Globalblock U.K. has until March 23, 2022, to respond to the warning notice. The company is taking advice from leading experts in these matters, and will present a rigorous and fulsome response to the FCA. If the FCA, having considered Globalblock U.K.'s representations, decides to refuse the application, Globalblock U.K. will have the right of appeal. Globalblock U.K. will remain under the temporary registration regime and will be able to continue to operate its business while it responds to the FCA and until a final decision is made by the FCA in respect of the application.

Rufus Round, chief executive officer of the company, commented: "Assets traded on crypto rails are on all counts inherently relective of a higher standard than traditional finance. Not only are transactions eminently more traceable, but they are also subject to rules that are defined and verified by cryptographic processes and therefore resistant to human operational failings. Globalblock U.K. has engineered FCA compliance into its DNA. Our processes are identical to those that a traditional FCA regulated business would incorporate, save for the fact that the superior features of blockchain technology enhance our controls and procedures to the higher standard of crypto. With this is mind, we are naturally disappointed with the FCA process as it is being currently applied. Nevertheless, we are confident that upon reviewing our operations in detail, the robustness of our processes will become clear to the FCA and that their misgivings will be allayed. We also acknowledge that the FCA has enormous pressure upon it to administer to the temporary registration regime and make decisions relating to a large number of firms ahead of its self-imposed deadline. As a precaution, the company is analyzing all options and considering other jurisdictions that would enable our trading to continue with minimal friction and that also provide greater optionality with regard to the ever evolving regulatory landscape."

The company will issue additional press releases related to these matters as it progresses the process with the FCA.

About Globalblock Digital Asset Trading Ltd.

Globalblock is a publicly traded holding company whose wholly owned subsidiary, Globalblock Ltd., is a United Kingdom-based digital asset broker that provides a personalized telephone brokerage service, trading platform and mobile app. Established in 2018 by an experienced team of financial service professionals, Globalblock acts as a trusted agent serving the digital asset needs of individuals, corporates, institutional financial firms and intermediaries, providing best execution trading and safe custody of digital assets.

Globalblock has been temporarily registered under the Money Laundering, Terrorist Financing and Transfer of Funds (information on the payer) Regulations 2017 as a crypto asset business until March 31, 2022, pending the determination of the application by the Financial Conduct Authority. At this time, Globalblock only accepts United Kingdom and Ireland resident clients or customers for its digital asset broker or trading services.

We seek Safe Harbor.

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