FCA: “any token that is not a security token, or an e-money token is an unregulated token.”
The UK Financial Conduct Authority (FCA) has published its much anticipated final guidance on cryptoassets following a feedback period on prior commentary. The FCA has now established which sector of crypto is regulated by the authority and which digital assets fall outside their remit. The FCA said the majority of respondents had supported their previous proposals on a regulatory approach. Additionally, the agency noted that few changes had been made since the prior document with the exception of “reframing” the taxonomy of cryptoassets to provide greater clarity for firms operating in the sector.
The FCA said that 92 different firms and individuals provided feedback ranging from big banks, to crypto exchanges, issuers, and individuals.
The FCA provided an important caveat stating the Guidance should act as a first step for market participants to understand whether authorization is required and should be read in conjunction with PERG [Perimeter Guidance Manual]. Where market participants are unsure and require regulatory feedback, Innovate support functions such as the Sandbox or Direct Support can provide this help for requests that meet the eligibility criteria for support. Market participants should also consider obtaining appropriate external advice.
E-Money and security tokens fall under FCA regulation but everything else, depending on the specific characteristics of the cryptoasset, do not fall under the watchful eye of the UK regulator
The Guidance follows a report published last fall from a crypto task force which included HM Treasury, the FCA and the Bank of England.