FCA consulting on guidance for regulating cryptoasset activities

UK regulator The Financial Conduct Authority (FCA) is consulting on guidance which will outline what cryptoasset activities it regulates.

This guidance will provide firms with a better understanding of whether their cryptoasset activities come under FCA regulation. Through this, firms will be able to recognise if they need to be authorised and ensure they meet necessary compliance requirements and safeguards.

A decision to hold consultation was taken in response to industry request for greater clarity and also as part of the Cryptoasset Taskforce’s recommendation that the FCA delivers additional guidance on the existing regulatory framework.

The FCA stated that while there are only a limited number of cryptoasset investors, this is growing, and consumers should approach them with ‘caution and be prepared to lose money.’

Christopher Woolard, executive director of Strategy and Competition at the FCA, said, “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.”

Later in the year, the FCA is set to consult on banning the sale of derivatives linked to certain types of cryptoassets to retail investors. In addition, the government is expected to consult on whether regulatory parameters around cryptos be expanded.

A deadline for comments on the consultation paper has been set to 5 April.

Last week, the FCA released new rules which will allow victims of authorised push payment (APP) fraud to complain to the PSP receiving the payment.