The Financial Conduct Authority (FCA) of the United Kingdom of Great Britain has published its “Final Guidance” on the crypto industry.
It was announced today on the official website, where it is explained that this Final Guidance on crypto assets is the response to the consultation published earlier this year.
This new guide is specifically intended to help the public understand which crypto assets fall under the UK jurisdiction and are thus subject to FCA regulations. This will allow companies to better understand whether they need authorisations, or what they need to do to ensure that they comply with UK law.
To achieve this, the FCA has also included a distinction between various types of cryptocurrencies within the regulatory perimeter, so as to identify which rules should be applied to individual assets.
It also admits the absence of some regulatory protections in the case of the purchase of unregulated cryptocurrencies, such as bitcoin, Ether and XRP, as these are not covered by the financial services compensation system, and do not require the services of financial brokers.
In this regard, the FCA calls on consumers to be cautious when investing in such crypto assets, so as to ensure that they understand and accept “the risks involved with assets that have no intrinsic value”.
FCA’s Executive Director of Strategy and Competition, Christopher Woolard, said:
“This is a small, complex and evolving market covering a broad range of activities. Today’s guidance will help clarify which cryptoasset activities fall inside our regulatory perimeter“.
One of the key points that emerges from this Final Guidance on crypto is that FCA will not regulate “exchange tokens” such as Bitcoin, or their exchanges, as they do not fall within the regulatory perimeter of the FCA.
Matt Hopkins, head of the Fintech section of the financial services team of BDO LLP, an accounting and commercial advisory firm, commented:
“It’s positive to see the FCA clarifying its approach to regulating cryptoassets, but the speed of progress remains very slow and deliberate. There is a risk that the FCA will end up being too reactive in protecting retail investors.
It’s very understandable that the FCA does not want to ‘legitimise’ some of the crypto exchanges by regulating them – that risks giving false assurance to retail investors about how secure the products are.
There is quite a fine line for the FCA to tread in protecting consumers while not stifling innovation, but the direction of travel is towards regulation. The FCA should make sure it is ahead of the curve, and not forced to regulate exchanges by a scandal later”.
