FCA answers calls for cryptoasset clarity
The UK’s Financial Conduct Authority is in a consulting mood as it seeks to set out the cryptoasset activities it regulates.
The guidance will help firms understand whether their cryptoasset activities fall under FCA regulation.
Christopher Woolard, executive director of strategy and competition at the FCA, says: “This is a small but growing market and we want both industry and consumers to be clear what is regulated, and what isn’t. This is vital if consumers are to know what protections they’ll benefit from and in ensuring we have a market functioning as it should.”
The consultation is in response to industry requests for greater clarity, and to the Cryptoasset Taskforce’s recommendation that the FCA provides additional guidance on the existing regulatory perimeter.
According to the regulator, while numbers are still relatively small, an increasing number of consumers are investing in cryptoassets.
As the FCA has previously made clear, “consumers should approach cryptoassets with caution and be prepared to lose money”.
Consumers may be unaware of the limited regulatory protections for cryptoassets services that fall outside the FCA’s regulatory remit, such as the lack of recourse to the Financial Services Compensation Scheme and the Financial Ombudsman Service.
Later this year the FCA will consult on banning the sale of derivatives linked to certain types of cryptoassets to retail investors. That follows on from this news report in April 2018.
The UK government is planning to consult on whether to expand the regulatory perimeter to include further cryptoassets activities.
The FCA is asking for comments on the consultation paper by 5 April 2019. You can do that – and get more info – here.
The busy regulator is not shy about discussing crypto matters.
For example, back in November 2018 its crypto force was looking into limiting exchange tokens.