On 31 July 2019, the FCA published Policy Statement 19/22: Guidance on cryptoassets – feedback and final guidance to CP19/3 (PS19/22). In PS19/22 the FCA responds to the feedback it received to Consultation Paper 19/3: Guidance on cryptoassets (CP19/3) (our blog is here) and sets out the final guidance.
The purpose of CP19/3 was to provide clarity on the FCA’s regulatory perimeter for market participants carrying on activities in the cryptoasset market. The FCA consulted on draft guidance based on the different categories of cryptoassets initially defined in the UK Cryptoasset Taskforce Report and set out whether they fell within the regulatory perimeter.
In PS19/22 the FCA reports that the majority of respondents to CP19/3 were receptive to its proposals. The FCA has therefore decided to proceed on the basis on which it consulted. The final guidance remains largely the same as the version consulted on. However, the FCA has made amendments in a few areas, for example it has amended the wording in the guidance to provide further clarity on tokens commonly referred to as stablecoins. The FCA has also made minor drafting changes throughout the guidance, particularly to provide more clarity where tokens might be e-money.
In terms of next steps, the FCA expects market participants to take the final guidance into consideration and will use it as a basis on which the regulator can proactively engage with any cryptoassets firms to check whether they are carrying on regulated activities.
The FCA states that the final guidance will inform further work being carried in this area, including:
- Consultation Paper 19/22: Prohibiting the sale to retail clients of investment products that reference cryptoassets (CP19/22);
- HM Treasury’s consultation on whether further regulation is required in the cryptoassets market, particularly in relation to unregulated cryptoassets;
- HM Treasury and FCA work on transposing the Fifth Anti-Money Laundering Directive (5AMLD).