UK’s Crypto Industry Receives Cryptoassets Guidance
The FCA stated that up to 92 different firms and individuals gave feedback. This ranged from big banks, crypto issuers and exchanges to individuals. Most respondents supported the proposal. Real cryptocurrencies like Bitcoin and Ethereum, which the agency classes as exchange tokens, are immune to regulation although anti-money laundering rules still apply.
Furthermore, FCA provided a definition of security tokens. These assets behave like shares or debt instruments when issued. These falls under the category of Specified Investment therefore fall under the FCA's jurisdiction. Approximately all respondents agreed with the assessment of the security tokens under regulatory parameters.
In contrast, utility tokens don’t provide the same sort of rights as financial instruments. Thus, they fall outside the agency’s remit except when they fall under the category of e-money tokens. This creates a regulated e-money tokens category and an unregulated utility tokens category. The agency said:
”Any token that is not a security token, or an e-money token is unregulated. However, market participants should note certain activities that use token may nevertheless be regulated, for example, when used to facilitate regulated payments.”
The financial watchdog also added that, “Market participants should use the Guidance as the first step in understanding how they should treat certain Cryptoassets; however definitive judgments can only be made on a case-by-case basis.”
Moreover, the FCA is preparing for brexit and it said that it is working to ensure: “The UK’s legal and regulatory framework for financial markets will also continue to function in the absence of a withdrawal agreement or implementation period.”
Staring august, the agency will start making restrictions for non-crypto CFDs. Following that, in September it will start restricting for non-crypto-like options. Consultations on how to regulate the derivatives with underlying Cryptoassets will end in 3rd October. Moreover, the agency’s proposal on this is a blanket ban.
About The Author
Mary BrendahMy first love is music – then goes writing. I don’t write fiction, I analyze bulls and bears in markets. I call it my jungle, the digital jungle of crypto and chains.
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