The Financial Conduct Authority has released a new consultation paper where it details new guidelines on cryptocurrencies and clarifies the agency’s role of regulating them in the country.
The UK’s financial regulator wanted to clarify the rules applying to assets such as unregulated and regulated tokens including the ones classified as securities.
The main focus of the paper was the determination of FCA’s role in the industry and the obligations that crypto companies will have to face in the coming months.
One of the key points was the importance of the EU Fifth Anti Money Laundering Directive which could potentially affect all crypto entities located within the United Kingdom.
Although it may seem hypocritical of UK government agencies to adopt EU laws judging by the upcoming Brexit it’s still important to note that they will remain in the same region, therefore they will have to play with the same rules.
The AML rule will most likely double down on KYC guidelines which will include even more vigorous reporting of customer activity on cryptocurrency exchanges and hedge funds. This entails the introduction of a maximum sum of funds that can be transacted into crypto without going through government surveillance.
This could also be a tip of the hat to the new FATF guidelines, but most market experts are calling it an evasion of last this month’s announcement for a proposal to ban crypto CFDs.