Regulatory frameworks for cryptoassets move closer in the UK and EU
As the EU prepares to vote on its Markets in Crypto Assets Regulation in April, the UK government is hoping to steal a march as a location for cryptoasset businesses.
At one point it seemed as if the EU would comfortably have its regulatory framework for cryptoasset businesses in place before the UK did. But even if its Markets in Crypto Assets (MiCA) Regulation is finally voted through in April – having been delayed from November 2022 and then February of this year – there will still be an 18-month transition period that would push full implementation back to the final quarter of next year.
This gives the UK’s Financial Conduct Authority (FCA) plenty of time to act on the results of the consultation on proposals for regulating cryptoasset activities, which, with an April 30 deadline, could pass a matter of days (or even hours) after the MiCA vote.
The UK’s registration regime for cryptoasset businesses has been described by some as too onerous. Speaking last month, Lisa Cameron – chair of the all-party parliamentary group on crypto and digital assets – suggested that some companies that wanted to do the right thing and engage in a very constructive way had simply given up on the UK’s registration process and gone elsewhere.
We are keen to explore further the ways in which the plans for digital assets are consistent with the approach to traditional finance
By January, the FCA had determined more than 260 applications for registration under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 from cryptoasset businesses, of which just 15% were approved.