In brief Following its February 2023 consultation and call for evidence on a future financial services regulatory regime for cryptoassets, HM Treasury issued its policy statement on the wider cryptoasset regulatory regime on 30 October 2023. The policy update was published alongside a flurry of publications on the regulation of cryptoasset services, including interlinked policy documents covering regulation of fiat-backed stablecoins and the failure of systemic digital settlement asset (DSA) firms . This briefing covers the so-called “Phase 2” regulation of wider cryptoasset activities. For more information on the stablecoin regime and the failure of systemic DSA firms, see our dedicated alert issued alongside this one: United Kingdom: The future of UK stablecoin regulation – Treasury and regulators provide more detail on approach . Key takeaways The Treasury’s policy statement largely confirms that it intends to implement the proposals consulted on in February 2023 – moving to a FSMA-style authorisation regime of crypto activities and bringing a significant proportion of crypto related activities fully in-scope of FCA authorisation requirements. For background and detail on the Treasury’s initial proposals in its consultation, see our client alert from earlier this year. It is helpful that there is further clarity on the intended outcomes for non-fungible tokens (NFTs), utility tokens, security tokens and other data objects or ‘things’ that were previously thought could be unintentionally captured by the new regime. However, there remains some uncertainty as to how NFTs and utility tokens will be treated, as their regulatory treatment will ultimately depend on how they are used, and ultimately firms will still need to analyse their characteristics given that they have not been entirely excluded from the future regulatory regime. No grandfathering is expected to be available for FCA-authorised firms or firms registered for money laundering requirements under the Money Laundering, Terrorist […]
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