Altalix is registered with the FCA as a crypto assets company, achieved as part of the FCA Regulatory Sandbox programme and with the backing of the FCA Innovation Hub. Altalix's reputation with the FCA, along with its compliance first approach made this an appealing proposition for Clear Junction and having previously had a client relationship with them, they were able to work collaboratively on this deal and the next phase of growth for both companies.
This strategic acquisition is a significant milestone in Clear Junction’s growth journey as it works towards becoming a one-stop shop for its clients to manage global payment and treasury needs.
According to data from Statista, the digital asset market is increasing rapidly, with the number of cryptocurrency users predicted to reach 994.30 million by 2027, and revenue in the cryptocurrencies market expected to grow by 14.40% annually, reaching USD 64.87 billion by 2027. This expanding market presents a favourable prospect for growing fintech companies like Clear Junction who do not currently focus on this sector.
Notably, in June 2023, the Law Commission published its final report to the UK Government which advised that the common law system in England and Wales is well-placed to provide a coherent and globally relevant regime for existing and emerging types of digital assets. In addition, given HMRC’s declaration that digital assets such as crypto assets are taxable since they are not considered currency, money, or gambling, it is clear that the inevitable growth of the digital asset market will require a roster of fintech and payments companies capable of accommodating its growth and evolution. Even the Prime Minister of UK sees the kingdom becoming a global hub for digital assets in the future, as per the press release.
Clear Junction has confirmed that it does not pursue digital assets trading or become an exchange, but, prior to the acquisition of Altalix, it has taken into consideration market sentiment, the progressive approach by the UK, and the needs of its clients’. It therefore believes that, in order to remain competitive in the payments space in the long term, it needs to position itself to be able to offer both fiat and digital services to its clients in the future.
Dima Kats, CEO of Clear Junction, commented that it has been a pleasure to work with the management team at Altalix, and the wider team while they were a Clear Junction client. The payment solutions provider went through a rigorous change in control process with the FCA as part of its acquisition. This transaction not only gave them a competitive advantage with a unique combination of crypto asset registration and an EMI license from the FCA, but also reflects their commitment to the evolving financial industry. They are closely monitoring UK regulatory developments in digital assets and aim to expand their expertise and product offerings to align with market trends, particularly in providing correspondent account services to regulated institutions.
Altalix will operate as a separate entity and rebrand as Clear Junction Digital. Its focus will shift from retail clients to exclusively serving regulated institutions, aligning with Clear Junction's market strategy. The acquisition is viewed as an investment in compliance and service stability, enhancing their infrastructure for future digital asset offerings, Dima continued. They plan to spend Q4 integrating the new business, updating policies, and developing pilot products. This acquisition comes after the recent launch of CJClique, a platform for digital asset clients to collaborate, and the attainment of ISO 27001 certification for information security.
Established in 2016, Clear Junction’s proprietary technology enables the quick and safe access to payment accounts, e-money accounts, virtual IBANs, and treasury services for regulated institutions. By working with Clear Junction, clients can shorten the time to market they typically face when establishing banking relationships, access new markets, and tap into game-changing technologies and expertise.
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