FCA Consultation Paper on Cryptoassets
Following the FCA Consultation Paper on the regulation of cryptoassets, we highlight some interesting issues in our detailed report.
We had a hard look and overall like where the FCA is heading. It is a sensible approach following standard securities regulations without going overboard. We feel that the FCA approach of looking at the intrinsic properties of the token in question is clearer and more sensible than the rule based standards used by the SEC.
If you don’t read further remember this:
- If it looks like a security, it probably is a security
- Be careful how you market/sell your tokens - financial promotion entails a big set of rules and prohibitions
- Bitcoin, Litecoin, Ethereum, and the like (FCA calls them exchange tokens) are not regulated
- Payment services regulations (PSRs) and E-Money regulations (EMRs) mostly do not apply except perhaps to stablecoins
Goals of this Piece
- A common sense explanation of the proposed UK regulation
- Where we think the proposal is positive or negative for the market
Earlier this year the FCA released a Consultation Paper on the regulation of cryptoassets. A Consultation Paper is an outline of what the FCA is thinking and an invitation for market participants to comment before they publish their final rules later this year. We are talking to the FCA and our thoughts and concerns are outlined here.
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