Sat. Aug 17th, 2019

Are UK Crypto Regulations Coming this Summer?

Are UK Crypto Regulations Coming this Summer? 101
Source: iStock/wildpixel

The United Kingdom may be edging closer toward regulating cryptocurrencies – with a financial watchdog indicating it is ready to act, and legislation forthcoming as early as summer this year.

Per an official statement, the regulatory Financial Conduct Authority (FCA) will consult “later this year” on a proposed countrywide ban on derivatives “linked to certain types of cryptoassets.”

The FCA also said it wanted to clarify which parts of the “cryptoasset” sector “fall under FCA regulation.” The watchdog says that doing so will help companies who work in the sector get a “better understanding of whether they need to be authorized” and “ensure they are compliant and have appropriate consumer safeguards in place.”

The FSA has published a consultation paper, and will now hold a public consultation session until April 5 – before issuing a policy statement in summer. The watchdog says it is acting in “response to industry request for greater clarity,” although it adds that consumers should “approach cryptoassets with caution, and be prepared to lose money.”

Last year, the FCA participated in a taskforce project reporting on the need for regulations in what it terms as the “cryptoasset” sector. Also participating in the project were the UK Treasury and the Bank of England.

In October 2018, the taskforce concluded that regulators should consult on “implementing one of the most comprehensive responses globally to the use of cryptoassets for illicit activity,” and first mooted “a potential prohibition of the sale to retail consumers of derivatives referencing certain types of cryptoassets (for example, exchange tokens), including CFDs, options, futures and transferable securities.”

Meanwhile, yesterday, some speakers at the World Economic Forum in Davos argued that “crypto is too small for regulation.”

The FCA is currently investigating 18 unnamed companies “involved in the sale of cryptocurrencies” on suspicion of possible market irregularities.

Elsewhere in the UK, Europol (The European Union Agency for Law Enforcement Cooperation) has arrested a man in Oxford on suspicion of stealing some USD 11.4 million worth of IOTA tokens from 85 people over the past 12 months. Per the BBC, the arrest came after a joint investigation involving state police from Hesse in Germany, Europol and the National Crime Agency. The suspect is aged 36, and police said they had confiscated “computers, drugs and cash” from a home in the city.

UK investors have also been warned that the deadline for declaring cryptocurrency-related earnings is fast approaching – and that tax documentation must be submitted by the end of this month.