FCA Keeps EPayments on Lockdown, Crypto Unlikely at Fault

Upon "Agreeing" with the watchdog, ePayments froze all of its customers' accounts, blocked their prepaid cards, and banned new account openings "Until remedial action has been undertaken to the satisfaction of the FCA.".

Since July 2014, ePayments has been certified as an "Authorised Electronic Money Institution" by the FCA, meaning that the watchdog has given it permission to issue electronic money and provide payment services.

In 2014, Rymanov founded Digital Securities Exchange, an exchange "Tailored for digital currencies." It is a "Partner business," meaning that all DSX customers are "Required to go through ePayments on-boarding process, in terms of identity verification." Rymanov remains the CEO of both ePayments and DSX, while the companies also share the same address in London.

According to the DSX official website, 20% of all transactions on ePayments involve crypto, while as many as 1 million ePayments customers allegedly "Have a safe, reliable way to handle crypto," thereby confirming the connection between the two.

Notably, ePayments has recently edited out the mention of a total number of users from its website - as of Dec. 24, 2019, the company claimed to have 847,375 customers enrolled with the platform, which suggests that ePayments registered the remaining 150,000 customers in just over a month and a half.

On Feb. 12, the next day after ePayments had frozen all accounts, its partner business DSX announced that all transfers between DSX and ePayments will be temporarily suspended, while the ePayments customers who wish to continue exchanging crypto can still register at DSX through their ePayments accounts.

While it is unclear what bank now handles DSX transfers, prior to the FCA incident, both DSX and ePayments collaborated with the same Latvian bank called Rietumu Banka.

According to Twitter commentators and data provided by CoinGecko, most cryptocurrencies on DSX have been trading for a 10-20% premium since the ePayments suspension, supposedly due to the increased amount of customers wishing to withdraw their funds from the ePayments-affiliated platform.

In it, the company stated that it cannot provide a concrete timeframe on when the customers are expected to get their accounts back but reassured that "All of your funds are safeguarded as normal and are not affected by the work we are currently undertaking." In addition, ePayments noted that its FCA license is not being revoked.

It seems like ePayments has been collaborating with the FCA. On Monday, the company announced that it had made "Good headway," and added more questions to the aforementioned FAQ. Per one of the new points, ePayments asks all customers who are called or emailed by someone claiming to be from ePayments or the FCA to "Please end the call / do not reply to the email and contact us directly."