Highlights:
- Blockchain.com executives face prosecution for delayed financial filings, highlighting regulatory pressures on cryptocurrency firms.
- Legal action against Blockchain.com executives stems from failure to submit 2022 accounts on time, citing restructuring issues.
- Blockchain.com, valued at $7 billion in 2023, faces legal action and potentially unlimited fines for failure to meet regulatory obligations.
London-based cryptocurrency company Blockchain.com has had senior executives face legal action over delayed financial disclosures. Nicolas Cary, co-founder and president, along with operations executive Al Turnbull, were summoned by Companies House in May 2024 for failing to submit company accounts on time. These delays are said to be to the firm’s financial accounts for the year ended December 2022, proceedings which are ongoing in UK courts, the Telegraph reported.
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Prosecution Due to Filing Delays
Blockchain.com’s legal troubles began when the company did not file financial accounts for 2022 on time. The executives submitted accounts for the year ending in 2020, well past the expected deadlines. The company’s delayed filing of accounts for the year ending in 2022 forms the legal basis for the claims.
It is vital that these filings are made under UK law because directors are personally liable for the company keeping its financial disclosures up to date. Failure to do so can result in significant penalties, including unlimited fines.
Cardiff Magistrates Court was first to hear the case on September 25, 2024. The company will continue to defend against those charges in a subsequent court hearing set for November 26. The court could impose hefty fines on the senior executives if convicted. Blockchain.com’s directors have already engaged legal counsel and are ready to fight the charges.
Reasons for Delayed Filings
Blockchain.com attributes the delay in filing stemmed from a major restructure that saw blockchain.com lay off staff across the company. The company recently filed its 2020 accounts, in which the executives said reducing the staff had taken time to stabilize, affecting the firm’s ability to meet its statutory filing requirements. During the restructuring period, the company struggled to maintain regular operations despite employing hundreds of workers globally.
In its defense, Blockchain.com’s leadership team said they are taking the necessary steps to comply with all filing obligations in the future. The company’s financial irregularities, however, have already grabbed the UK’s attention. The cryptocurrency sector has faced increased regulatory oversight in the UK in recent months.
Increased Regulatory Pressure
The UK’s widening push to tighten the oversight of cryptocurrency firms has been accompanied by legal challenges facing Blockchain.com. In October 2023, clear risk labels were mandated by new regulations that crypto firms must put into their advertising and communications.
The UK government has also allowed Companies House additional power to enforce compliance with financial reporting obligations. Consequently, this includes removing false or incomplete data from company registers. These measures reflect the increasing focus on transparency and regulatory compliance to adapt to the rapidly changing cryptocurrency market.
Blockchain.com is not the only high-profile company to face legal action over delayed financial filings as Companies House intensifies its enforcement efforts. The agency has also stepped up investigations into other big firms. This includes those owned by steel magnate Sanjeev Gupta, whose companies were also prosecuted for not filing their accounts on time.
Blockchain.com underwent a successful fundraising round in 2023, valued at $7 billion. It has attracted significant investments from key players such as Baillie Gifford, Google Ventures, and billionaire Yuri Milner’s DST Global. However, the ultimate outcome of the blockchain.com executives facing prosecution could have long-term consequences for Blockchain.com’s leadership and position in the industry.
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