In short, the watchdog said:
- There is risk of consumer confusion where regulated firms provide services involving cryptoassets;
- It is a criminal offence for firms carrying on cryptoasset activity to not be registered with FCA;
- Firms should be reviewing FCA’s Unregistered Cryptoasset Businesses page;
- Clients with cryptoasset wealth should be risk-assessed using the same criteria applied to other forms of wealth ;
- The new investment firm prudential regime (IFPR) includes cryptoassets business;
- Where cryptoassets are specified investments (ie, security tokens), custody of these assets is likely to be subject to the FCA’s Client Assets Sourcebook regime; and
- The FCA will be “engaging with industry participants to seek insights” as it further develops its views on cryptoasset legislation.
Where the regulator said there is a “risk of consumer confusion” when regulated firms provide services involving cryptoassets, the FCA told firms they are required to help consumers understand the extent of business which is regulated and “clearly distinguish” those elements which are unregulated business.
The watchdog also reminded firms that since January 2020, firms carrying on cryptoasset activity in the UK must be registered with the FCA - not to be is a criminal offence, the watchdog warned.
Currently, there are a handful of crypto-related firms on a temporary FCA register, including digital banking giant Revolut which offers crypto trading services.
As of March 31, however, firms must have authorisation from the FCA to be on its permanent register.
ruby.hinchliffe@ft.com
