The Financial Conduct Authority (FCA), will be publishing today, the Final Guidance which set to regulate the cryptocurrency asset activities, a press release confirmed.
The guidance supposedly will enable firms to understand whether their crypto-asset activities fall under the FCA regulation. It is coming in response to the FCA’s consultation published earlier this year.
In January, the financial regulator announced it is consulting on Guidance for cryptocurrency assets on the bid to provide regulatory clarity for market participants involved in activities within the UK crypto space.
Noting that crypto-assets market and the underlying Blockchain technology is developing rapidly, participants need to be clear on where the conduct such activities that fall within the scope of FCA’s regulatory remit.
To that regard, the Final Guidance is hoped to allow firms to have a clearer understanding as to whether they need to be authorized and what they need to do to ensure they are compliant to the regulator, FCA.
“This is a small, complex, and evolving market covering a broad range of activities. Today’s Guidance will help clarify which crypto asset activities fall inside our regulatory perimeter,” said Christopher Woolard, executive director of Strategy and Competition at the FCA.
The Final Guidance will be published as consulted on, with some amendments to make a significant distinction as to which crypto assets fall inside the regulatory perimeter clearer. The majority of respondents supported the proposals outlined in the consultation.
However, FCA urged consumers to be mindful of the absence of certain regulatory protections when trying to purchase unregulated crypto assets.
The Financial Services Compensation Scheme does not cover unregulated crypto-assets such as Bitcoin, Ether, XRP, and consumers do not have recourse to the Financial Ombudsman Service, the report reads.
Consumers should be careful enough when considering investing in crypto assets. They should ensure they “understand and can bear the risks involved with assets that have no intrinsic value.”
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