The initial news coming out of that announcement was that BTC and ETH were decentralised and therefore not securities and ultimately, not under FCA jurisdiction.
That still didn't actually clear them of any responsibilities, however, only safety by exclusion. And as pointed out, doesn't clear the activities involving these assets, so it's kind of just saying: use bitcoin, if you will, we don't care, but the way you do shit still got to fly.
Topic: FCA Guidance on Cryptoassets (Read 165 times)
At the end of the day, they are all just cryptocurrencies with the same goal/use to me.
There are projects which are under the control of a small group of people and were created to enrich them or fund something else they've created.
That's a very different proposition to properly decentralised coins which head out into the world for anyone to pick up. Plenty of assholes are using the real deals to hide behind.
Regulation of sorts is an inevitability. I think it's sensible for those who are regulating to attempt to delineate between fully open projects, cash grabs or hidden securities. At present it's a very broad church with only one categorisation. The problems start when innocent projects get the wrong definition.
They are already trying to draw a line between security and utility tokens. Call it as you may but this only gets weirder and weirder for the common folk who just wants to buy bitcoin/whatever crypto and keep it. Perhaps this might be applicable to those who wish to create their own tokens but for those average Joes? I don't think so. A clearer and more concise way of detailing what is and what isn't for crypto is simple enough as a guideline and go from there IMO. Utility, security, exchange? At the end of the day, they are all just cryptocurrencies with the same goal/use to me.
It doesn't really look like they're delivering enough clarity for those who have plans to go all in yet. Must try harder.
This is quite expected especially since this is coming from governmental agency that actually do not have the complete view of the very industry they are trying to regulate. We also have to understand that these regulators are trying to tame a new beast. But one thing we should appreciate is that this is better than having no guidelines at all. At least, this can be the start of something and then later on amendments can be suggested to FCA. Just like in life, sometimes we can't have our cake and eat it too.
A bit of a summary of sorts here - https://bitcoinist.com/bitcoin-and-ethereum-dont-need-regulation-uk-fca/
and here - https://www.theblockcrypto.com/2019/07/31/uk-regulator-issues-relaxed-guidance-on-crypto-and-clear-domain-over-security-tokens/
It's differentiating between types of coin rather like the SEC.
These are their categories. BTC and ETH have been declared 'exchange tokens'. Interesting to know which other coins fall outside that. Maybe they can't be bothered at present. Too many to wade through.
'Exchange tokens: These are not issued or backed by any central authority and
are intended and designed to be used as a means of exchange. They tend to be
a decentralised tool for buying and selling goods and services without traditional
intermediaries. These tokens are usually outside the perimeter.
• Utility tokens: These tokens grant holders access to a current or prospective product
or service but do not grant holders rights that are the same as those granted by
specified investments. Although utility tokens are not specified investments, they might
meet the definition of e-money in some circumstances (as could other tokens). In this
case, activities involving them may be regulated.
• Security tokens: These are tokens with specific characteristics that mean they provide
rights and obligations akin to specified investments, like a share or a debt instrument
(described in more detail in Chapter 3) as set out in the Regulated Activities Order
(RAO). These tokens are within the perimeter.'
It doesn't really look like they're delivering enough clarity for those who have plans to go all in yet. Must try harder.
and here - https://www.theblockcrypto.com/2019/07/31/uk-regulator-issues-relaxed-guidance-on-crypto-and-clear-domain-over-security-tokens/
It's differentiating between types of coin rather like the SEC.
These are their categories. BTC and ETH have been declared 'exchange tokens'. Interesting to know which other coins fall outside that. Maybe they can't be bothered at present. Too many to wade through.
'Exchange tokens: These are not issued or backed by any central authority and
are intended and designed to be used as a means of exchange. They tend to be
a decentralised tool for buying and selling goods and services without traditional
intermediaries. These tokens are usually outside the perimeter.
• Utility tokens: These tokens grant holders access to a current or prospective product
or service but do not grant holders rights that are the same as those granted by
specified investments. Although utility tokens are not specified investments, they might
meet the definition of e-money in some circumstances (as could other tokens). In this
case, activities involving them may be regulated.
• Security tokens: These are tokens with specific characteristics that mean they provide
rights and obligations akin to specified investments, like a share or a debt instrument
(described in more detail in Chapter 3) as set out in the Regulated Activities Order
(RAO). These tokens are within the perimeter.'
It doesn't really look like they're delivering enough clarity for those who have plans to go all in yet. Must try harder.
https://www.fca.org.uk/publication/policy/ps19-22.pdf
This guidance is relevant to:
• firms issuing or creating cryptoassets
• firms marketing cryptoasset products and services
• firms buying or selling cryptoassets
• firms holding or storing cryptoassets
• professional advisers
• investment managers
• recognised investment exchanges, multi-lateral trading facilities and organised trading
facilities
• consumers and consumer organisations
Where an FCA authorised firm carries on unregulated activity (for example, in relation to
an unregulated cryptoasset), while that activity may not require a permission in itself, it
is possible in certain circumstances that some FCA rules, like the Principles for Business
(PRIN) and the individual conduct rules under the Senior Managers and Certification
Regime (SMCR), may apply to that unregulated activity. Unregulated activities may also be
relevant in assessing whether the firm continues to comply with the Threshold Conditions
for authorisation.
This guidance is relevant to:
• firms issuing or creating cryptoassets
• firms marketing cryptoasset products and services
• firms buying or selling cryptoassets
• firms holding or storing cryptoassets
• professional advisers
• investment managers
• recognised investment exchanges, multi-lateral trading facilities and organised trading
facilities
• consumers and consumer organisations
Where an FCA authorised firm carries on unregulated activity (for example, in relation to
an unregulated cryptoasset), while that activity may not require a permission in itself, it
is possible in certain circumstances that some FCA rules, like the Principles for Business
(PRIN) and the individual conduct rules under the Senior Managers and Certification
Regime (SMCR), may apply to that unregulated activity. Unregulated activities may also be
relevant in assessing whether the firm continues to comply with the Threshold Conditions
for authorisation.
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