The Financial Conduct Authority has released a statement on the requirement for firms offering crypto derivatives to be authorised.
The debate surrounding the regulation of cryptocurrencies is long ongoing, with players ranging from the UK Treasury to the G20 stepping in to have their say. Today, the Financial Conduct Authority (FCA) has released a statement in an attempt to clear up when cryptocurrencies and crypto-related assets fall under existing regulation and which firms need to be concerned.
Although cryptocurrencies themselves are not currently regulated by the FCA, cryptocurrency derivatives are capable of being financial instruments under the Markets in Financial Instruments Directive II (MiFID II). According to the statement, this means that firms conducting regulated activities in cryptocurrency derivatives must comply with all applicable FCA rules and EU regulations, and therefore be FCA-authorised.
Such derivatives would include:
Therefore firms currently working with any of these derivatives would require FCA authorisation. Those participating in ever-trendy Initial Coin Offerings (ICOs) should be also wary, and are recommended to contact the FCA if they are unsure.