The UK Financial Supervisory Authority has published a new guide on digital assets.
The guidelines provide a comprehensive overview of what FCA will regulate in the crypto space. The new rules provide that utility tokens must only comply with KYC rules, while security tokens require additional approvals.
The regulatory authority’s Crypto Asset Task Force was formed last year and hoped to establish how crypto assets fall within the existing regulatory perimeter. After publishing their proposals in January, they opened a consultation period to request feedback. This period ended in April.
Four types of digital assets
The FCA has announced four types of cryptocurrencies:
- Security tokens – are classified as “specific investments” and fall under the aegis of FCA. Anyone trading this type of token must obtain a license from the regulatory authority.
- Utility tokens – which will not fall under the FCA’s authority under “most circumstances”. Hybrid types require that the FCA will still need to be consulted to decide on a verdict.
- Stable cryptocurrencies that generally seem to be classified in electronic money (e-money) and come under the authority of FCA.
- Exchange tokens – like Bitcoin, do not fall under the supervision of the FCA, but the exchanges that trade them must still comply with anti-money laundering rules.
The FCA has not imposed additional regulations for crypto exchanges and other market participants.
CryptoUK Group expressed the opinion of the community:
“In general, the changes made provide more clarity in the crypto domain.”
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