London-based crypto asset management firm Prime Factor Capital has obtained a license from the Financial Conduct Authority (FCA) to operate as a full-scope Alternative Investment Fund Manager (AIFM). The development was announced in a press release on July 1
Being FCA-authorized gives Prime Factor Capital the right to operate as a full-scope AIFM under the European Union’s AIFM Directive (AIFMD). The Directive is a regulation applied to private equity funds, hedge funds, and real estate funds, which sets standards for marketing in regards to raising private capital, risk monitoring and reporting, among other issues.
As required by AIFMD, Prime Factor Capital has ostensibly appointed a depository that provide additional layer of protection to investors. Adam Grimsley, COO of Prime Factor, said that “full-scope AIFMs are subject to heightened transparency, disclosure and reporting requirements, in addition to a number of other obligations.”
Nic Niedermowwe, CEO of Prime Factor, stated, “This Being FCA-regulated brings us under the purview of one of the most recognised financial markets regulators globally. This is particularly relevant in the cryptocurrency space, which has repeatedly captured headlines for poor operating standards and even fraudulent activity.”
The press release claims that Prime Factor is the first dedicated cryptocurrency asset management firm authorized by the FCA. As reported last August, the FCA granted its third e-money license to Wirex, whose main product is a prepaid debit card that converts crypto into fiat currency for everyday use.
The FCA also launched a United Kingdom fintech sandbox in March 2016 aiming to facilitate innovative fintech development within a protected testing environment that streamlines strict regulatory requirements. In late April, the sandbox onboarded three more blockchain businesses from a total of 99 applications.