UK partner Felicity Potter, has expressed her thoughts over the recent Government proposals concerning the regulation of crypto assets in the UK. This includes the plan to incorporate a number of crypto asset activities within the regulatory perimeter of financial services.
Felicity comments:
“Sentiment towards the government’s overall approach has been positive with around 80% of responses to the consultation supportive of the creation of crypto assets regulations within the perimeter for financial services. Legislation setting out the new proposed regulations is due to be introduced in 2024.”
“The creation of crypto assets regulations regime within the financial services regulatory perimeter is welcome. It will provide greater protection and transparency to crypto investors through regulating activities and a disclosure regime for all crypto assets which are made for trading on a UK trading venue."
“For crypto businesses the territorial scope of the proposed regulations is far reaching in that it applies to regulated activities of crypto businesses both in and to the UK. As such, overseas crypto businesses providing services in or to the UK will be caught by the regulations and it is the government’s position that firms dealing directly with UK retail consumers should be required to be authorised irrespective of where they are located. The extent to which such regulations can and will be enforced on overseas firms remains to be seen and the government has indicated that it intends to consult with the FCA to seek to devise ways to mitigate the risks posed by overseas crypto businesses in this context."
“With these proposed measures, the government is seeking for the UK to be a crypto-friendly jurisdiction that aims to balance innovation with the need to protect end-users and investors. As technology advances expand at a rapid rate, time will tell to what extent any new regulations foster innovation and are able to adapt to future technological advances in digital assets.”
Further information
For questions related to the topics raised in this article, please contact Felicity Potter or read: ‘Key takeaways: the new financial services regulations for crypto assets in the UK’
