Emma RadmoreHM Treasury has published the key draft legislation that will enable full FSMA-style regulation of activities relating to crypto-assets.
The regulations, which will be subject to the affirmative resolution procedure in Parliament as they will make certain activities that were not previously criminal offences into criminal offences by bringing them with in the FSMA regulatory perimeter and the RAO.
The legislation will in the main amend the RAO to introduce new regulated activities and corresponding new definitions, specifically of “qualifying cryptoassets”, “qualifying stablecoin” and “specified investment cryptoassets”. The new regulated activities will be:
- issuing qualifying stablecoins in the UK;
- safeguarding of qualifying cryptoassets and specified investment cryptoassets;
- operating a qualifying cryptoasset trading platform;
- dealing in qualifying cryptoassets as principal;
- dealing in qualifying cryptoassets as agent;
- arranging deals in qualifying cryptoassets; and
- qualifying cryptoasset staking.
There will also be amendments to other legislation, including:
- FSMA in respect of enabling provisions and to clarify how certain activities that take place outside the UK will be considered to take place in the UK;
- the Financial Promotion Order in respect of controlled investments;
- the FSMA (CIS) Order and AIFM Regulations in respect of an exemption for backing assets or stabilisation mechanisms for qualifying stablecoin;
- the FSMA (By Way of Business) Order;
- the EMRs in respect of exclusions to stored monetary value; and
- the MLRs in respect of the transition from being registered to authorised as crypto-asset providers.
Technical comments are welcome on the draft legislation before 23 May.