Is Great Britain luring you to open a cryptocurrency company there? Then it is important to remember how this country regulates different types of virtual currencies. We will now focus on the key legal requirements for cryptocurrencies and find out what crypto activities fall under the regulation.
Firstly, it is necessary to define the characteristics and structure of a virtual currency to determine if it is regulated in Great Britain. The FCA has issued the Guide to Cryptoassets and labeled three categories of digital assets:
- Digital currencies – virtual currencies that fulfill the definition of EMR on electronic money; regulations are applied to them;
- Utility tokens – digital currencies that are only used as a medium of exchange and are not issued by the central bank; do not fall under the regulatory requirements;
- Security tokens – virtual currencies that guarantee similar rights and obligations like stocks, bonds, or CIS units; regulated cryptocurrencies.
Although the UK is leaving the EU, the rules of the European Union regarding the provision of financial services still apply to the cryptocurrency regulation in Great Britain even after its withdrawal. The regulation is governed by these legislative acts:
- CRD – oversees activities of credit institutions such as accepting deposits;
- EMD and PSD (both revised) – regulate the provision of payment services and issuance of e-money;
- MiFID II – controls the provision of investment services and operations with financial instruments;
- EU AML Directive.
In addition, in 2020 the FCA started to observe whether UK-registered crypto companies comply with AML regulations.
Hopefully, this article was helpful with the basic understanding of crypto regulation in the UK. For a more in-depth consultation on digital currencies in Britain and all the requirements necessary to fulfill for starting a crypto business there do not hesitate to contact COREDO and arrange a personal meeting. Our specialists have a truly professional approach to each businessman and will inform you about all stages of conducting cryptocurrency activities in Europe.