UK regulator grants first license to a crypto asset management firm

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The Financial Conduct Authority has authorized Prime Factor Capital as an Alternative Investment Fund Manager (AIFM). The license will allow the London-based crypto asset management firm to operate as a full-scope AIFM under the European Union’s AIFM Directive.

In a press release shared with CoinGeek, the firm revealed that this was the first time the FCA had granted such a license to a crypto asset manager.

The license is a big step in the right direction, both for the firm and the industry, Prime Factor’s CEO Nic Niedermowwe stated. He added, “This is a significant milestone not just for Prime Factor, but for the industry as a whole. Being FCA-regulated brings us under the purview of one of the most recognised financial markets regulators globally.”

The license was especially relevant in the crypto industry, an industry whose name has been tainted by allegations of poor operating standards and outright fraud, he continued. “Investors need to be able to trust their managers not only to generate returns, but also to act responsibly and in their best interest.”

Adam Grimsley, the firm’s COO attributed its continued success to robust systems and experienced management team. And indeed, the firm’s top management boasts of great experience amongst them. Grimsley spent over a decade at Blackrock, the world’s largest asset manager, as an investment specialist. The firm’s chief investment officer Michael Wong also spent over a decade at Blackrock as a senior portfolio manager.

Grimsley stated, “The robustness of a firm’s systems and processes is as important to institutional investors as an experienced management team and outstanding track record. […]We are pleased to be able to offer institutional investors with a suitable investment vehicle to deploy capital to this emerging asset class with its unique risk-return profile.”

As required by the EU’s AIFM Directive, Prime Factor has appointed a depositary. The depositary will provide an additional layer of protection to investors through independent fund oversight, cashflow monitoring and asset ownership verification.

The FCA has continued to be actively involved in the crypto industry, aiming to foster growth while protecting the consumers. In May, it announced that three blockchain firms had been admitted to its regulatory sandbox where they would enjoy relaxed regulatory measures in order to grow their products. The regulator has also continued to alert the public regarding any crypto firm that it suspects is conducting fraudulent activities.