In April, the UK government published its proposed financial regulations for certain activities related to cryptoassets that will be supervised by the Financial Conduct Authority. Now, the FCA is consulting on the rules that it will apply. The consultation paper is a useful 'explainer' for those unfamiliar with FCA's approach to regulation and supervision, as many in the crypto world will be. There is a lengthy 'cost benefit analysis' in Annex 2 that's worth burrowing into for the specific impact of the rules on the crypto sector (as the FCA views it). The consultation ends on 12 November, with some items for comment by 15 October. Even more, activity-specific rules will be published for consultation on by year end as part of the FCA's 'crypto roadmap'.
The regulated cryptoasset activities will include issuing qualifying stablecoins, safeguarding qualifying cryptoassets and specified investment cryptoassets, operating a qualifying cryptoasset trading platform, intermediation and staking.
FCA rules are very extensive and require firms to have appropriate systems, controls, processes, financial resources and expertise. For a sector that is very much anchored in libertarian, 'techno optimist' waters, this represents a tsunami...
