In the midst of increasing heist cases and illicit business models in the crypto industry, UK’s Financial Service Agency (FSA) is proposing a ban on certain crypto products. Accordingly, the agency will release a final statement upon completing the newly released ‘consultation paper’.
What is ‘Guidance on Cryptoassets’ Consultation Paper?
On Jan 23, 2019, an official website of FCA reveals that they are organizing the ‘consultation exercise on Guidance on Cryptoassets’ which has opened from today and will be closed on April 05, 2019. Following the result, the agency will release policy statement in summer 2019.
- FCA opened a circular of ‘Guidance on crypto assets’ on Jan 23, 2019
- Various crypto-related business, professionals can apply and participate
- The proposal will end up in 10 weeks, all feedbacks must be submitted by Friday 05, April 2019
- Users can also respond via email to FCA’s official email ID
- The consultation paper will open up the better picture of regulatory frameworks for crypto business
- The final consultation guidance or feedback box will be published in summer 2019
Image source – FCA’s release screenshot
Encouraging Better Clarity on Regulation for Crypto Assets
The official announcement reads that this consultation paper is the ‘next step in FCA’s work on crypto assets’. It states;
The FCA has carried out work on crypto assets, both as part of a broader UK Cryptoasset Taskforce and independently to achieve our objectives. This consultation paper is the next step in the FCA’s work on crypto assets and sets out details on where different types of crypto assets might fall in the regulatory perimeter.
Regulator across various countries are at their best to form effective frameworks with better clarity. In contrast, despite the market crash, projects on crypto assets are emerging at a higher level. FCA believes that market participant would need a clear scope in terms of regulatory compliant. Following this, Britain’s FCA is rolling out a ‘consulting on Guidance for crypto assets wherein the key motive is to provide a crystal-clear picture of regulatory parameters to market participants and businesses in crypto space.
Accordingly, the agency will present ‘final guidance’ in summer this year to enusre all crypto players to determine whether their business or activities fall under ‘FCA’s regulatory remit’ to obtain authorization for the same.
We are consulting on Guidance for crypto assets in order to provide regulatory clarity for market participants carrying on activities in this space. The crypto asset market and the underlying DLT technology is developing quickly and participants need to be clear on where they are conducting activities that fall within the scope of the FCA’s regulatory remit and for which they require authorization.
How to Consult & for Whom is it?
The consultation paper would underline the four alternatives for crypto tokens to determine, whether it should be;
• Specified Investments under the Regulated Activities Order
• Financial Instruments under the Markets in Financial Instruments Directive II
• E-Money under the E-Money Regulations
• captured under the Payment Services Regulations
FCA calls almost every player in connection with cryptocurrency to participate in the consultation exercise. If you are the firm involving issuing crypto assets, marketing, trading, holding crypto assets, or a professional adviser, investment managers, recognized investment exchanges, or consumer organizations, you can provide feedback to FCA’s open proposal before 04th April 2019.
Upon collecting all the responses, FCA will present final Guidance in late this year. Consequently, participants involving in crypto business will have a clear scope on whether the crypto assets they’are using are within the regulatory perimeter.
This will alert market participants to pertinent issues and should help them better understand whether they need to be authorized and what rules or regulations apply to their business.
So what do you think about FCA’s effort? Do you think it brings better approach to regulate crypto market? Share your opinion
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Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com