The Financial Conduct Authority (FCA), the regulatory body tasked with overseeing the country’s financial markets, has clarified its stance on crypto assets, stating which tokens it’s responsible for.
Today’s policy statement is a response to a consultation paper published by the FCA in January, which prompted 92 responses from several financial services entities, including cryptocurrency exchanges, trade associations, and banks. Most responses supported its original proposals, the regulator said.
“Following our consultation, we are proceeding with the guidance that was consulted on, with some drafting changes to improve clarity based on responses. This includes reframing our taxonomy of cryptoassets to help market participants better understand whether tokens are regulated, and where they fall outside our remit,” the report reads.
The FCA’s latest policy provides several important clarifications and definitions.
For example, cryptocurrencies such as Bitcoin and Ethereum, which the FCA considers to be “exchange tokens,” are not regulated, but will adhere to anti-money-laundering regulations.
Additionally, the statement says “security tokens,” which fall under the FCA’s “specified investment” category will fall under the watchdog’s remit.
In stark contrast, utility tokens will fall outside the FCA’s control, except for when they can be defined as electronic money and fall with a new category of e-money tokens.
Some stablecoins can also be defined as e-money and as such may also be subject to the FCA’s control.
“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,” Christopher Woolard, the FCA‘s executive director of strategy and competition, said in a statement.
Earlier this month, the FCA proposed a ban on some cryptocurrency-related investment products in a bid to protect retail investors.
A statement at the time said that cryptocurrency-based derivatives and exchange–traded notes (ETNs) were “ill-suited to retail consumers who cannot reliably assess the value and risks.”
Published July 31, 2019 — 13:12 UTC