The UK’s top financial authority Financial Conduct Authority (FCA) has released a new consultation paper for cryptoassets in the country. While the FCA has reportedly been considering a more direct role in managing cryptocurrencies and tokens, the new paper is an attempt to make things clearer for investors and the cryptocurrency community for future regulatory purposes.
A series of final guidelines or policy guidelines are now awaited from the FCA after the release of this consultation paper as far as regulatory dynamics go.
According to the regulator: “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.”
In the extensive paper, the FCA outlines different possible definitions of crypto assets based on the existing laws of the country and it all depends on the role of the network. According to the paper, crypto assets can be considered as “Specified Investments” under the state’s Regulated Activities Order (RAO) or “Financial Instruments” regulated by the Markets in Financial Instruments Directive II. Under this definition, the FCA believes that some assets can be regulated under the Payment Services Regulations.
However, tokens promising returns could be classified under the Regulated Activities Order (RAO) and are thus within FCA’s jurisdiction. Utility tokens are expected to have a different category and may not fall under the same category as security tokens.
While it is just a paper for now, these actions of the UK government are confidence boosting as it is trying to clear the smoke around the regulatory status of different types of crypto assets.
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