UK Fintech and Crypto Startup Leaders Warn of Funding Exodus

• Ripple and ClearBank warn UK crypto firms may relocate as regulatory clarity remains elusive.
• Zopa, Augmentum Fintech cite funding and Brexit headwinds pushing founders abroad.
• ClearBank stalls stablecoin launch pending full rules from Bank of England, eyes global shift.

UK’s fintech and cryptocurrency sectors are facing increasing strain, with industry leaders warning that regulatory uncertainty and capital scarcity could force startups to shift operations to more supportive global markets. 

Executives from several firms told CNBC that the U.K.’s regulatory landscape has become increasingly challenging, raising concerns about the country’s ability to retain and attract entrepreneurs in the fast-moving world of digital finance.

U.K. Losing Innovation Ground to Global Competitors

Jaidev Janardana, CEO of U.K.-based digital bank Zopa, said the country has gone from leading fintech innovation to emphasizing regulatory caution. He noted that while the U.K. still holds advantages over the EU in certain areas, markets like Singapore and Hong Kong have overtaken it in terms of regulatory agility and tech-forward policies.

“The U.K. now prioritizes safety and soundness over growth,” Janardana said, warning that complacency could erode the U.K.’s global edge.

Related: WikiLeaks’ Assange Leaves U.K. After Reaching Deal with U.S. Prosecutors

Founders Struggle With Funding and Talent Access

Tim Levene, CEO of venture firm Augmentum Fintech, pointed out that startup founders are struggling to raise capital in the U.K.. He noted that many are exploring launches in the Gulf region, the U.S., Australia, and parts of Asia where investor appetite and regulatory clarity are stronger.

Additionally, Lisa Jacobs, CEO of Funding Circle, pointed to Brexit as a continuing issue that has made it harder to attract foreign talent. She pointed out the importance of maintaining momentum in ecosystem development. She stated that, although the U.K. has the necessary ingredients, continued effort is required to remain attractive for new businesses.

Regulatory Delays Hit Crypto Expansion Plans

Crypto executives say the U.K. is also falling behind in digital asset regulation. Cassie Craddock, Managing Director of Ripple U.K. and Europe, said other jurisdictions are pulling ahead thanks to regulatory clarity. She cited MiCA’s implementation in the EU, along with fast-moving frameworks in Singapore, Hong Kong, and the UAE, as examples of what the U.K. is missing.

Related: SEC Reverses Course on Crypto Regulation: Acting Chair Orders Rethink of Stricter Firm Rules

In a concrete example of the fallout, ClearBank CEO Mark Fairless revealed that his company has delayed its stablecoin plans due to regulatory ambiguity. “We won’t move forward until the Bank of England gives full clarity,” Fairless said.