Bitcoin, cryptocurrency and blockchain startups exploded onto the London financial

technology scene over the last few years, but now, due to a combination of potentially
tougher new regulation and the UK's looming exit from the European Union, things could be
about to take a turn for the worse for the fledgling bitcoin and crypto sector.

It could be about to all go wrong for London's bitcoin, crypto, and blockchain startups.
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The U.K.'s prime minister, Boris Johnson, who has taken over from Theresa May after she
spent two fruitless years trying to negotiate a Brexit deal with the E.U., has steered the
country towards a feared so-called no-deal Brexit scenario, potentially causing chaos–though
perhaps boosting the bitcoin price.

While Johnson has clashed with the U.K.'s parliament over the possibility of a no-deal Brexit,
it remains on the table, fueling business uncertainty.

If the U.K. does eventually leave the E.U. trading bloc without a deal, financial technology
companies would lose access to the bloc's single market–while bitcoin and cryptocurrency
startups may struggle to justify a London office without an easy route into Europe.

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"The uncertainty around Brexit has already taken a major toll, particularly for non-U.K.
companies doing business in the U.K.," said Felix Shipkevich, a New York-based lawyer
specializing in digital currency and financial technology.

Financial technology businesses have already been found to be moving from the U.K. to the
E.U. in preparation for Brexit, according to report from capital markets think tank New
Financial, out earlier this year.
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"If fintech businesses in the U.K. can’t access international individuals working in areas such
as machine learning, artificial intelligence and blockchain as easily after Brexit, this could
cause a contraction in the sector because currently, up to a fifth of the skills used by the
fintech sector in the U.K. have come from the EU," Sarah Hall, senior fellow at the U.K. in a
Changing Europe research group, told bitcoin and crypto trade news website, Cointelegraph.

Last month, the U.K.'s financial services watchdog warned potential investors that bitcoin
and cryptocurrencies have "no intrinsic value," with some taking the caution as a signal the
country could be moving towards a bitcoin ban.

Just last week, the Bank of England governor Mark Carney, who has previously poured scorn
on bitcoin and its crypto peers, said a global digital currency could replace the U.S. dollar as
the world’s reserve currency–and likely directly compete with bitcoin and other major
cryptocurrencies.

The bitcoin price has climbed this year, despite the U.K.'s financial industry watchdog
warning it has "no intrinsic value."
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Meanwhile, one promising crypto startup has already run into difficulties, according to
reports.
Nodal Labs, a blockchain-powered freelance marketplace, has missed payments to staff with
a boardroom battle underway for control of the floundering crypto company, according
to AltFi, an alternative finance and fintech news website.

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Billy Bambrough

I am a journalist with significant experience covering

technology, finance, economics, and business around the
world. As the founding editor of Verdict.co.uk I reported ...
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