Whilst the majority of cryptoassets themselves are unregulated in the UK, businesses providing certain services involving cryptoassets will need to comply with various regulatory regimes.  Such businesses may need to be registered with the FCA as a cryptoasset exchange provider or custodian wallet provider (see our earlier article on this here).  Also, even if operating from overseas, firms communicating ads (including service offered on their webpages) involving crypto to UK consumers will need to comply with the UK financial promotion regime (see our earlier article on this here).

The consequences of getting it wrong can be serious.  Last Thursday, the FCA announced that it had arrested two individuals suspected of running an illegal cryptoasset exchange through which more than £1bn of cryptoassets were believed to have been bought and sold.  This followed searches of offices and two residential properties.  The FCA interviewed under caution both suspects and released them on bail while continuing its investigation.  The business will have been added to the FCA’s warning list of firms operating without the required FCA authorisation or registration.

If your business model involves cryptoassets and you are concerned you may not be operating compliantly, please contact us for advice.