London, UK and Vancouver, British Columbia – GlobalBlock Digital Asset Trading Limited (TSX Venture: BLOK) (US OTC:BLVDF) (FSE:BD4) (the “Company” or “GlobalBlock”) provides the following update on the pending application (the “Application”) by the Company’s wholly owned UK subsidiary, GlobalBlock Limited (“GlobalBlock UK”) for registration as a cryptoasset business with the Financial Conduct Authority in the United Kingdom (the “FCA”) in accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“the MLRs”). GlobalBlock UK 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 UK has now received a Warning Notice from the FCA indicating that it is minded to refuse the Application. While the Company continues to analyse 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 UK in July 2021, and that because of that review the FCA suspects that GlobalBlock UK 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 UK 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 UK's representations, decides to refuse the Application, GlobalBlock UK will have the right of appeal. GlobalBlock UK 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, CEO of the Company comments as follows:
“Assets traded on crypto rails are on all counts inherently reflective 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 UK 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 analysing 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 THE COMPANY
GlobalBlock Digital Asset Trading Limited is a publicly traded holding company (TSXV: BLOK) whose wholly owned subsidiary, GlobalBlock Limited (https://www.globalblock.co.uk), is a United Kingdom based digital asset broker that provides a personalised telephone brokerage service, trading platform and mobile app. Established in 2018 by an experienced team of financial services professionals, GlobalBlock Limited 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 Limited has been temporarily registered under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as a cryptoasset business until 31st March 2022, pending the determination of the application by the Financial Conduct Authority. At this time, GlobalBlock Limited only accepts United Kingdom and Ireland resident clients or customers for its digital asset broker or trading services.
For further information please contact the Company at:
Rufus Round, CEO
c/o 65 Curzon Street, London, W1J 8PE, United Kingdom
Tel. +00 44 20 3286 2904
https://globalblock.co.uk/ and http://www.globalblockdigital.com/
Citigate Dewe Rogerson
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information set out in this news release constitutes forward-looking statements or information. Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. In particular, this news release contains forward-looking statements in respect of among other things, the continued and successful development of the businesses of each of the Company and GlobalBlock Limited, the ability of GlobalBlock Limited to obtain the applicable regulatory approvals (including permanent registration with the Financial Conduct Authority in the United Kingdom) to continue to conduct its business and other information concerning the intentions, plans, future action and future successes of the Company, and its businesses, technologies and products described herein. Forward-looking statements are based upon the opinions and expectations of management of the Company as at the effective date of such statements and, in certain cases, information provided or disseminated by third parties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, and that information obtained from third party sources is reliable, they can give no assurance that those expectations will prove to have been correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risk factors set forth in the Company’s most recent management's discussion and analysis, a copy of which is filed on SEDAR at www.sedar.com, and readers are cautioned that the risk factors disclosed therein should not be construed as exhaustive. These statements are made as at the date hereof and unless otherwise required by law, the Company does not intend, or assume any obligation, to update these forward-looking statements.
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