UK FCA Guidance for Cryptoasset Compliance 2020

The regulatory landscape in the UK is changing and these changes affect cryptoassets holders. In order to be compliant some cryptoasset holders may need to be registered with the Financial Conduct Authority (FCA). Please read this simple flowchart to find out if you need to be registered.

Do I need to register with the FCA to carry out cryptoasset activity?

Does your business:

  • Exchange, or arrange, or make arrangements for a view to exchange cryptoassets for money or vice versa, or one cryptoasset for another cryptoasset?
  • Operate a machine which uses automated processes to exchange money for cryptoassets or vice versa (e.g. an ATM)?
  • Provide custodian services for:
    • cryptoassets on behalf of your customers
    • private cryptographic keys to hold, store and transfer cryptoassets?

Is the activity carried out by way of business in the UK?

Some factors we will consider:

  • Commercial element: Do you advertise or act in a way that suggests you are providing cryptoasset services by way of business?
  • Commercial benefit: Do you receive direct or indirect benefit from this service?
  • Relevance to other business: How significant is the activity to the business' other activities (cryptoasset activities may be only part of the business)?
  • Regulatory/frequency: Does the frequency of the activity suggest that it is being carried on as a business?

Do you:

  • Have a registered or head office in the UK and do you carry on day-to-day management of these activities from this office, irrespective of where, geographically, the cryptoasset activity is conducted?
  • Operate one or more ATMs in the UK?
  • Have any UK presence that is engaged in or facilitates cryptoasset activities?

FCA registration is likely to be required

See our registration timelines:

https://www.fca.org.uk/firms/financial-crime

Existing cryptoasset businesses which were carrying on cryptoasset activity immediately before January, 10 2020 may continue with that business, but must still comply with the MLRs. But they must be registered before January 10, 2021 or stop all cryptoasset activity. To ensure that we can work with you to meet this deadline, we strongly encourage you to apply as soon as possible and no later than June 30, 2020.

New cryptoasset businesses that intend to carry on cryptoasset activity after January 10, 2020, must be registered before carrying out any activity.

FCA registration may not be required

But we may ask you to explain why you think your activities are not in scope. You must consider the specifics of your business and decide whether registration is required. If you are uncertain, you may wish to seek legal advice.

For more details on regulation of UK cryptoasset businesses please go to the FCA’s main crypto regulation page.

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To remain safe and compliant as a cryptoasset holder, being registered with the FCA is just the first step. You also need to be sure that the assets you are connected to are of legal origin. Use Crystal Blockchain for monitoring cryptocurrency transactions to protect your assets from risk exposure.