The office of financial regulation and supervision of the UK (FCA) published a document proposing to classify scriptactive into three categories and apply the existing legislation.
According to representatives of the FCA, scriptactive carry potential risks for consumers and investors. Legal clarity in this area will help companies to conduct business, without violating existing legislation.
“This is a small but growing market. And we want to industry businesses and consumers to clearly understand what is regulated and what is not” — said General Director of the FCA on questions of strategy and competition Christopher Woolard.
The Agency considers such cryptocurrencies as bitcoin and Litecoin, in the category of “exchange tokens”. The FCA clarifies that such coins do not belong to the investment objects and not recognized in the UK as a means of payment. In addition, these assets are more volatile compared with, for example, commodities or Fiat currencies. Buying and selling of “token exchange” is not regulated by the FCA.
However, security tokens refer to investment instruments in accordance with the Law on financial services and markets and the EU Directive “O markets in financial instruments” (MiFID II). For such tokens, the same rules apply as for traditional securities. The issuers of the security tokens must apply to the FCA for permission.
Utility-tokens under certain circumstances, apply to electronic money. In most cases, such assets are not regulated by the FCA, because, as a rule, do not have properties of securities.
Stabilini in some cases can fall under the definition of electronic money. For example, if they “backed by certain assets, a basket of scriptaction or managed by the algorithms regulating the supply of tokens”.
Now the FCA will collect public comments regarding the proposed regulation. This phase will last until 5 April.
ForkLog previously reported that the FCA is investigating the activity of 50 of cryptocurrency companies that operates without a license.
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