It was a pleasure to attend the latest series of policy roundtables hosted by the Financial Conduct Authority as the industry looks to collaborate on the possible routes forward regarding the expansion of the UK regulatory regime to trading venues and other cryptoassets “intermediaries”.

There were some really interesting views put forward by the working groups around how to address operational resilience (cyber and governance unsurprisingly remain high on the agenda), managing conflicts, market access arrangements and order management and execution.

My personal takeaway from the discussions on the architecture of the regime:

➡️ there is a reticence from industry to attempt to squeeze cryptoassets market infrastructure and intermediary activity into our existing investment firm regime without recognition of the specificities of the asset class and existing market and operational practices that have reasonably developed.

➡️ that said, there is clearly also a reticence for an entirely standalone cryptoassets regime for crypto market infrastructure and intermediaries – that risks creating arbitrage and dislocation in regulation across asset classes for operators doing largely the same activities and gives up a lot of the inherent understanding and experience we have from our existing regimes.

➡️ the sweet spot would be somewhere in the middle – leveraging a lot of what we already have where it works (which in the main it does) but ensuring that any regime appropriately adapts to reflect those specificities of the cryptoassets landscape. It is not quite 90% existing 10% new, but increasingly it seems that the effectiveness and appropriateness of our regulatory framework will rest on what we do with that 10%.