Digital Currencies Regulation in Great Britain

If you’re planning to register a crypto company in Great Britain, you should keep in mind that not all types of virtual currencies are regulated there. So, let’s take a closer look at what the main legal requirements for digital currencies are & which cryptocurrency activities are regulated in Great Britain.

Overall, a virtual currency’s characteristics & structure are a key factor in determining whether UK regulations apply to it. As per the FCA-issued Guide to Cryptoassets, 3 categories of digital assets are identified:

• Utility tokens - digital currencies which don’t fall under any regulatory requirements. They include digital currencies which aren’t issued by the central bank & are only used as an exchange medium.
• Digital currencies - virtual currencies meeting the EMR’s definition of e-money. They also come under regulatory oversight.
• Security tokens - virtual currencies providing obligations & rights similar to those of stocks, bonds or CIS units. Individuals planning to establish a crypto exchange in Great Britain should keep in mind that this type of virtual currencies falls into the category of regulated cryptocurrencies.

Despite Great Britain’s withdrawal from the European Union, the EU rules regulating financial services provision in the European Union are still applicable to the regulation of digital currencies in Great Britain.

If you’re interested in registering a company for ICO in Great Britain, you should keep in mind the following legislative acts regulating digital assets in Great Britain:

• CRD -  governing credit institutions’ activities, including accepting deposits;
• EMD (revised) & PSD (revised) - regulating e-money issuance & payment services provision;
• EU AML Directive.
• MiFID II - regulating operations with financial instruments & investment services provision in England;

Please note that starting from two thousand twenty, the FCA has been monitoring compliance of UK-registered crypto companies with AML regulations.

Advice on Regulation of Cryptoassets in Great Britain