Royal assent, a purely procedural step following agreement from lawmakers, makes the Financial Services and Markets Bill an Act, and includes measures to bring crypto and stablecoins into the scope of regulation. The new law will therefore also give legal protection to owners and companies against fraud and scams, while helping judges deal with complex cases where digital holdings are disputed or form part of settlements, for example in divorce cases. Previously, digital belongings were not definitively included in the scope of English and cryptocurrency regulation uk Welsh property law – leaving owners in a legal grey area if their assets were interfered with.

Firms carrying on cryptoasset activity

The objective of the Taskforce was to bring the Treasury, Bank of England and the FCA together to assess the potential impact of cryptoassets and DLT in the UK and to consider appropriate policy responses. In July 2019, The Economic Crime Plan announced that from January 10, 2020 the FCA will be the Anti Money https://www.xcritical.com/ Laundering and Countering Terrorist Financing (AML/CTF) supervisor for firms carrying on certain cryptoasset activity. See our dedicated cryptoassets AML regime webpages for more information. In April 2022, the government committed to introducing a new regulatory regime for cryptoassets, reflecting the risks and opportunities they present. There are notable differences between MiCAR and the UK’s regulatory plans, such as categorisation of cryptoassets, the scope of regulated activities and disclosure obligations for cryptoasset issuers.

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• The value of the 500 biggest crypto tokens also tumbled $1.7tn last year.
• UK Financial Services Minister John Glen said the UK saw “enormous potential in crypto” and had a “detailed plan [for] harnessing the potential of blockchain and supporting the development of a world-best crypto ecosystem”.
• Economic Secretary to the Treasury Andrew Griffith said the government remained “steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes crypto-asset technology”.
• The “devil would be in the detail”, he told BBC News, but he “absolutely welcomed” regulators looking at cryptocurrency – and the right regulation would be in the interests of the industry as well as customers.

Investment products that reference cryptoassets

Bill giving regulators the power to supervise crypto and stablecoins was approved by King Charles Thursday, marking the last formal stage that makes the bill law. Meanwhile, the US is moving to craft regulations amid rising concern that the cryptocurrency industry is a haven for criminals. The digital tokens, which emerged in 2014, can be thought of as certificates of ownership for virtual or physical assets. NFTs have a unique digital signature which means they cannot be copied or replicated. NFTs are assets in the digital world that can be bought and sold, but which have no tangible form of their own. Cryptocurrencies are virtual or digital currencies that can be traded or used to buy goods and services, although not many shops accept them yet and some countries have banned them altogether.

Government sets out plan to make UK a global cryptoasset technology hub

Cryptoasset businesses marketing to UK consumers, including firms based overseas, must start getting ready now for this regime,” said the FCA. The cryptoasset financial promotions regime applies to all firms marketing cryptoassets to UK consumers, regardless of whether the firm is based overseas or what technology is used to make the promotion. The proposals will also strengthen the rules around financial intermediaries and custodians – which have responsibility for facilitating transactions and safely storing customer assets. These steps will help to deliver a robust world-first regime strengthening rules around the lending of cryptoassets, whilst enhancing consumer protection and the operational resilience of firms.

The UK’s vision for being a global hub for cryptoasset technology was set out in a speech by the Economic Secretary to the Treasury, John Glen at the Innovate Finance Global Summit today. By recognising the potential of this technology and regulating it now, the government can ensure financial stability and high regulatory standards so that these new technologies can ultimately be used both reliably and safely. The government has published proposals for crypto-asset regulation it hopes will “manage” the risks of the “turbulent industry”. The move follows a year of acute turbulence in the digital asset industry, which included the collapse of Sam Bankman-Fried’s FTX cryptocurrency empire and lender Celsius, which left individuals globally with billions of dollars in frozen funds. The value of the 500 biggest crypto tokens also tumbled $1.7tn last year. The government’s proposed measures have been informed by recent market events – including the failure of FTX – which reinforce the case for effective regulation and sector engagement.

The government has confirmed its final proposals for cryptoasset regulation in the UK, including its intention to bring a number of cryptoasset activities into the regulatory perimeter for financial services for the first time. This document provides the government’s response to the consultation and call for evidence on the future financial services regulatory regime for cryptoassets, which was published on 1 February 2023 and closed on 30 April 2023. It summarises the feedback received by HM Treasury in response to the consultation, and details how this has influenced further development of the government’s approach. “We have been clear on the need for the financial promotions regime to be extended to cover cryptoassets.

Bitcoin, the world’s largest cryptocurrency, hit $72,000 for the first time while ethereum touched $4,000 for the first time since December 2021. Gemini ran a survey of 6,000 people in four major markets, including the UK and US. But, she said, compliance is the cost of doing business, that it’s what consumers expect. “Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires.

New specific rules for the crypto sector could come within 12 months, Griffith told CNBC in April. The Bill will also ensure Britain maintains its pole position in the emerging global crypto race by being one of the first countries to recognise these assets in law. These proposals will place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents – ensuring crypto exchanges have fair and robust standards.

As is common in emerging technology markets, the crypto sector continues to experience high levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector. The proposed regulations were released as part of the Labour government’s first budget tabled Wednesday. “With increased insight and data due to a longer period of trading history, the FCA believes exchanges and professional investors should now be able to better establish whether crypto-ETNs meet their risk appetite,” the regulator said in a statement.

So-called “stablecoins” will become recognised forms of payment to give people confidence in using digital currencies, it said. The Treasury has announced that it will regulate some cryptocurrencies as part of a wider plan to make the UK a hub for digital payment companies. Regulators in other major markets have become increasingly comfortable with investors buying crypto-linked securities, as long as the securities are in a regulated product. The Financial Conduct Authority said on Monday it would “not object” to the creation of bitcoin and ethereum-backed exchange traded notes for professional investors. Bim Afolami, the minister responsible for the financial services sector, promised they’d be ready by summer 2024 — but a snap election that Labour won put paid to that. This confidence has been fuelled by the participation or association of major financial institutions, such as BlackRock and Fidelity, including through the launch of Bitcoin exchange-traded funds (ETFs).

Jason Guthrie, European head of digital assets at the financial firm, Wisdom Tree, said the sector had a bright future. The “devil would be in the detail”, he told BBC News, but he “absolutely welcomed” regulators looking at cryptocurrency – and the right regulation would be in the interests of the industry as well as customers. This consultation paper sets out proposals for this future regime and marks the next phase of the government’s approach to regulating cryptoassets. It builds on previous HM Treasury proposals, which focussed on stablecoins and the financial promotion of cryptoassets.

And so, regulatory divergence is an additional challenge for this global and highly interconnected market. Cryptocurrency activity is currently not regulated by the UK’s Financial Conduct Authority; however, digital asset service providers that operate within the country’s borders must go through the watchdog’s anti-money-laundering review process. Around 85 per cent of crypto groups that attempt to obtain FCA registration have failed, stirring criticism from the industry that the UK has stifled innovation.

Late last year it expanded existing rules on how financial firms are allowed to market themselves to crypto businesses. MiCA’s stablecoin rules are in place for exchanges, wallets, and other crypto asset service providers. Since the collapse in November 2022 of global cryptocurrency exchange FTX with a reported $9 billion shortfall, the cryptocurrency market has recently undergone a much-needed resurgence in confidence.

The UK released draft regulations Wednesday that would require entities in the cryptocurrency sector to report tax-related information to authorities using rules developed by the OECD. Issuers can apply to list notes that are linked to the bitcoin and ethereum coins on the London Stock Exchange from April. ETNs are debt securities that track an underlying asset but are traded and settled through a central market entity like a stock exchange and securities depository. Stablecoins are designed to maintain a steady value by being connected to fiat currency, offering a less volatile option compared to cryptoassets.

The Treasury also said it planned to consult on regulating a much wider range of digital currencies later this year, without saying which they might be. The OECD released CARF in June 2023 as a way to align global tax reporting rules in the crypto sector … At the start of the year the US approved spot bitcoin ETFs, following countries in the EU, Australia and Canada. The newly approved group of US spot bitcoin ETFs, including ones issued by BlackRock and Fidelity, have collectively pulled $10bn since their launch in January, according to crypto investment group CoinShares. Almost 40% of respondents who did not own crypto said regulatory concerns kept them from entering the market.

The UK’s financial regulator will allow some bitcoin-linked securities to be listed on the stock market, in a softening of its tough stance on digital assets as investors around the world snap up funds investing directly in cryptocurrencies. It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country. In June 2023, we published our final rules for cryptoasset financial promotions in PS23/6. Ambitious plans to protect consumers and grow the economy by robustly regulating cryptoasset activities have been announced by the government.

Lynch’s prediction is more pessimistic than other UK crypto insiders I’ve spoken to, who agree we could see laws proposed as early as the end of the year. The government’s consultation on its proposals will close on 30 April, with any responses then considered by ministers. “Having a solid a regulatory framework, having enforcement capabilities, is really important for consumer confidence,” Mr Guthrie said.

Hundreds of billions of pounds were wiped from the crypto landscape and companies and people went bankrupt thanks to scandal after scandal. Even when the crypto market was booming, in 2021, calls for regulation were loud. Simply sign up to the UK financial regulation myFT Digest — delivered directly to your inbox.