While initially being somewhat welcoming to cryptocurrencies and ICOs the UK has recently gone the route of the US and is cracking down on ICOs and cryptocurrency.
Given this, and new regulations from the EU, it looks like ICOs will be much more heavily regulated going forward.
The United Kingdom is located in Europe (EU): The countries of the European Union hold a patchwork of individual attitudes towards cryptocurrency regulation, but all of them also fall under the jurisdiction of the EU Commission, though the UK is in the process of removing itself from the EU.
Cryptocurrency trading in the United Kingdom
The United Kingdom Treasury intends to crack down on Bitcoin over numerous concerns about its use in money laundering as well as dodging taxation. It is expected to implement a regulation that requires cryptocurrencies to disclose their identities and report suspicious activity at some point in 2018. Regulators do not believe that current regulations have kept up to speed with the changing world of crypto.
John Mann of the Labour Party offered this view on the area:
“These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get behind. Since that’s particularly important in terms of money-laundering, terrorism or pure theft”.
Previously the Financial Conduct Authority told investors and firms in cryptocurrencies and ICOs to proceed with caution, even warning against them. You do need to pay capital gains tax on cryptocurrency in certain situations.
In January the EU came out with new directives on cryptocurrencies, asserting that “gaps still exist in the oversight of the many financial means used by terrorists, from cash and trade in cultural artefacts to virtual currencies and anonymous pre-paid cards. This proposal seeks to address those gaps while avoiding unnecessary obstacles to the functioning of payments and financial markets for ordinary, law-abiding citizens and businesses, so balancing the need to increase security with the need to protect fundamental rights, including data protection, and economic freedoms.”
Mostly focused on ending anonymity among the crypto community, and preventing nefarious individuals from buying, funding, or selling orgs or resources. It does include the sharing of company and individual information with public entities at times, and affects exchanges and wallets.
It’s currently unclear though whether the UK will have to follow these regulations as well as it’s own given the Brexit process.
Regulation of ICOs in United Kingdom
In January of 2018 the Financial Conduct Authority announced they were going launch an even “deeper examination” into ICOs, which could increase regulation on them.
As previously noted, The Financial Conduct Authority issued a warning in September about the “speculative nature and high risks” of ICOs, including that “little to nothing materialises after a token issue.”
“The ICO market is evolving at great speed,” the FCA said, recognizing that even with the increased scrutiny, ICOs have continued to multiply. “We intend to gather further evidence on market developments and to conduct a deeper examination of this fast-paced phenomenon.
Their findings from the examination will determine where further regulation is needed, but given the rhetoric coming out of the government it seems like, along with the new EU regulations potentially
Cryptocurrency markets in United Kingdom
There are a number of ICOs in the country, and increased interest from the public, though impending regulations in addition to current ones may decrease the level of enthusiasm around crypto, or force ICOs to move to different countries.
IBC’s planning and strategy team can provide expert advice on ICOs in different jurisdictions. If you’re thinking of holding an ICO in COUNTRY and you’d like more information, contact us here.
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