What’s Next for the UK FCA's Cryptoasset Regime

The UK’s Financial Conduct Authority (FCA) launched a caller consultation past week seeking feedback connected proposals to govern however crypto firms bash concern successful the country.

The consultation focuses connected however firms offering cryptoasset services should conscionable requirements astir user protection, behaviour standards and regulatory oversight. It forms portion of the FCA’s wider crypto roadmap, which aims to align the attraction of cryptoassets much intimately with accepted fiscal services.

“These proposals proceed our advancement towards an open, sustainable and competitory crypto marketplace that radical tin trust,” the regulator said. “The Consumer Duty sets due standards for crypto firms by ensuring they present bully outcomes for customers portion supporting them to navigate their fiscal lives.”

The FCA added that portion regularisation should enactment innovation, it cannot destruct each risks associated with crypto investing. “We privation a marketplace wherever innovation tin thrive, but wherever radical recognize the risks,” it said.

The consultation covers a wide scope of argumentation areas, including user work obligations, redress and quality resolution, behaviour of concern standards, the usage of recognition to acquisition cryptoassets, grooming and competence requirements for staff, and the exertion of the Senior Managers and Certification Regime. It besides addresses regulatory reporting, safeguarding of cryptoassets, attraction of retail collateral successful crypto borrowing, and expectations astir wherever crypto firms should beryllium based to let for effectual supervision.

The proposals beryllium wrong a broader effort by UK authorities to bring cryptoassets afloat wrong the regulatory perimeter. Last month, the Treasury projected authorities that would spot cryptoasset activities nether afloat FCA oversight, extending the regulator’s remit beyond its existent absorption connected anti-money laundering registration. At present, crypto firms are required to registry with the FCA chiefly for AML purposes, including lawsuit owed diligence and transaction monitoring.

UK Chancellor of the Exchequer Rachel Reeves said the determination would fortify the country’s planetary standing. Bringing crypto into the regulatory perimeter is simply a "crucial measurement successful securing the UK’s presumption arsenic a world-leading fiscal centre successful the integer age," she said.

UK Treasury Plans to Bring Crypto Firms Under Full FCA Oversight

But the UK has besides faced disapproval for moving much dilatory than different large jurisdictions successful establishing a broad crypto framework.

Industry figures pass that timing whitethorn already beryllium an issue. Tim Meggs, co-founder and main enforcement of London-based integer plus liquidity and marketplace information steadfast LO:TECH, said the UK has spent years consulting portion competitors acted much decisively.