On July 31, 2019, the UK’s Financial Conduct Authority (FCA) published its finalized guidance on cryptoassets in a Policy Statement (PS19/22) with the stated aim of providing better protection to market participants.
The finalized guidance follows a consultation from January to April 2019 as part of the broader “UK Cryptoasset Taskforce” and includes a revised assessment of the cryptoasset markets and associated distributed ledger technology (DLT) within the FCA’s regulatory perimeter — setting out details on where different types of cryptoassets might fall.
It also includes recommended requirements that custodian wallet providers, exchanges and trading platforms should consider when conducting activities, as well as an updated taxonomy creating an e-money token category that can fall within the scope of the E-Money Regulations with guidance from the FCA as to where tokens are likely to be:
- specified investments under the Regulated Activities Order (effectively a type of regulated security);
- e-money under the E-Money Regulations;
- captured under the Payment Services Regulations; or
- are otherwise outside the scope of regulation
The FCA states in PS 19/22 that from the FCA’s perspective, the guidance provides a basis upon which it can proactively engage with cryptoasset firms to determine whether or not they are carrying on regulated activities in/ into the UK — and consequently whether such firms need to be licensed by the FCA to do so. The FCA expects market participants to take the guidance into consideration. If a firm acts in line with the guidance, the FCA will treat them as having complied with the relevant rule or requirement.
PS 19/22 is available here.