Who regulates crypto in the UK?

One of the renowned qualities of an investor would be to take a risk. Risk-taking here does not mean a plunge into the well because there is water and you are dehydrated, however, this is usually considered after a careful risk assessment to avoid being swallowed up by speculations or a good feeling.  

Cryptocurrency, the new digital currency has slowly permeated its way into our manner of business dealings with different cryptocurrencies emerging now and then. While some business brands have clearly stated their stance on the acceptance of a type of cryptocurrency for transactions like Tesla Inc that accepted Bitcoin as a payment option, some countries have also chosen cryptocurrency as their legal tender, making it safe for their citizens to transact with ease since there is a regulation backed up by their Apex Bank. 

In today’s article, we would be considering cryptocurrencies in the UK; their acceptance, and regulations. 

In the financial system, it is pertinent to have financial education, especially if business savvy. One of the information this would provide you in detail would be Risk assessment and management.  

The UK has enjoyed the establishments of multinationals and Fortune 500 companies with ties that have greatly influenced its GDP [Gross Domestic Product]. Therefore, there is a need to have a financial services industry in the UK to protect consumers' finances while keeping the industry stable and promoting a healthy dose of competition amongst financial service providers. 

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According to Wikipedia, the United Kingdom's Financial Conduct Authority (FCA) works independently of the United Kingdom Government and is supported via the collection of fees to members of the financial services industry. The FCA supervises financial companies offering consumer services and preserves the integrity of the UK's financial markets.

It concentrates on the regulation of behavior by financial services companies, both retail and wholesale. The FCA is constituted as an undertaking with a limited guarantee, like its predecessor the FSA.

Together with the Prudential Regulation Authority and the Financial Policy Committee, the FCA establishes financial-sector regulatory standards. The FCA is responsible for the conduct of about 58,500 companies with 2.2 million employees and contributions to the UK economy of over £65.6 billion in yearly tax income.

On January 10, 2021, all UK crypto-asset businesses with a presence in the UK that provides services to UK citizens or markets goods in the UK were urged to register with the Financial Conduct Authority (FCA). Critically, these organizations must meet AML/CFT reporting and customer protection responsibilities. The FCA emphasizes that businesses engaged in crypto-asset operations must also comply with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017(MLRs).  

Going by the avalanche of applications, the FCA created a temporary registration regime in December 2020 since it could not complete all registration applications brought in. The registration date was been pushed out to July 9th, 2021 under the interim administration. 

This was a scheme to safeguard customers from market volatility, since the FCA had earlier stated in late 2020 that retail bitcoin derivatives will be prohibited from January 6, 2021.  

1. The Ban is on derivatives offering  

2. Cryptocurrencies are not classed as legal tender. 

3. The FCA is responsible for the AML/CFT of crypto assets. 

4. VASPs [Virtual Asset Service Providers] have to apply to FCA for a license. 

5. Taxes are passed based on activities, entities & tokens. 

6. The Crypto assets Taskforce team is composed of the FCA, Treasury & BoE. 

In conclusion, the FCA is a regulatory body for financial activities. It was appointed as the main regulator of the cryptocurrency market in the United Kingdom. Therefore, it requested crypto companies to register with it before they can function in the region.

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