It’s an interesting question as crypto currencies are inherently global, like Western Union or Remitly, and so any local regulation in the UK is always up against some sort of dubious ID checks, or cash out procedures, at various less regulated exit points. Plus, the main attraction of crypto for UK investors is that these new virtual assets are something that are currently difficult for HMRC and the DWP to track in detail. Once it is logged, tracked and estimated as having some type of theoretical cash out value, then taxes will be levied. That may well stop this booming sector in its tracks, only time will tell.
Meanwhile here’s the latest from the FCA;
Crypto will be regulated in the UK from October 2027. The Financial Conduct Authority (FCA) is finalising the wider cryptoasset regime, with rules to be published this summer. Parliament has now confirmed which cryptoasset activities will fall within the scope of regulation.
Building on that, the FCA is consulting on new guidance to help firms understand how they might be affected by the regulatory regime for cryptoassets.
The regulator is seeking feedback on its interpretation of the following regulated cryptoasset activities:
- issuing qualifying stablecoin
- operating trading platforms
- dealing and arranging deals in qualifying cryptoassets
- safeguarding cryptoassets
- staking
The proposed guidance supports the FCA’s aim for an open, sustainable and competitive crypto market people can trust.
Crypto firms will be able to start applying for authorisation from September 2026. Ahead of this, the FCA is providing crypto firms with support on how to apply and to understand how the future regime could work.
Until the new regime comes into force, crypto is largely unregulated except for financial promotions and financial crime purposes. As with all high-risk investments, people should only put in what they can afford to lose.
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