The United Kingdom Financial Conduct Authority (FCA) disclosed the Final Guidance for the regulation of cryptoassets in the country. The document determines that security and coin tokens will be regulated. In addition, the text states that all the other tokens remain unregulated.
The justification is that the security tokens provide rights and obligations similar to the investments specified in the RAO – Regulated Activities Order, so they should also be regulated. Yet the currency tokens meet the definition of electronic money and will be regulated accordingly. Those tokens include some forms of stablecoins.
It has also been determined that the exchanges tokens are outside the regulatory perimeter of the FCA. In addition, utility tokens will remain unregulated.
United Kingdom final orientation on cryptoassets
The guidance is a response to the FCA consultation document on cryptoassets, from January 2019. The consultation document analyzed whether the cryptoassets could be considered “specified investments”’ under the RAO and other instruments and if they should therefore be regulated.
In this way, certain activities that use cryptoassets in the UK can start to be regulated. This can occur when they are used to facilitate regulated payments. In addition, the Fifth Money Laundering Directive will create an anti- laundering money regime for exchanges tokens.
Although the guide is a policy statement, market participants should use it as a basis for understanding how certain cryptoassets will be handled by the FCA. The opinions of the organ in these guidelines may not be binding. However, they can be a persuasive factor in litigation disputes and in the conformity with the law to be fulfilled by a participant.
Now it is the time for market players to begin reviewing their business activities that involve cryptographic assets and consider whether these activities will be subject to the regulation that may require authorizations or registration.