Great Britain’s Financial Conduct Authority (FCA) released its 2018-2019 business plan on Monday, April 9. The FCA explicitly stated that while crypto currencies and distributed ledger technology are not directly within their mandate, “some models of use or packaging cryptocurrencies bring them within our perimeter, making the landscape complex.”
The main news for the cryptocurrency industry in the business plan is that the FCA will be working with the Treasury and the Bank of England in a task force that will, “later in the year”, publish a Discussion Paper on the current government view of cryptocurrencies. The FCA also plan to propose updated rules on crowdfunding in 2Q2018-2019. No mention of cryptocurrencies was made in conjunction with the plans regarding crowdfunding.
Other FCA activities over the 2018-2019 calendar that could touch on crypto currencies include the publication of final rules and industry codes of conduct for unregulated markets, work to raise awareness of fraud and scams, the publication of its findings on money laundering in the e-money sector, and reviewing money laundering in capital markets.
The publication of Business Plan 2018-2019 comes after an April 6 announcement by the FCA that UK firms offering cryptocurrency based derivatives needed to be licensed by the FCA, and that failure to do so would be a criminal offense.
In the April 6 announcement, the FCA also pointed out crypto currencies themselves do not fall under their guidelines, but that the actions of those engaged in crypto related activities can be directly in the center of the Authority’s remit. Such actions include dealing with crypto currency futures, contracts and options.
On a broader scale, the FCA also tied cryptocurrency activity to the Authority in the earlier announcement by referring to the ongoing process of formulating regulations on distributed ledger technology. The Discussion Paper released on March 17 points to open questions regarding Initial Coin Offerings (ICOs), and so this activity in conjunction with the working group with Bank of England and the Treasury mentioned in the Business Plan will keep crypto currencies and how they connect to FCA’s remit firmly under the Authority’s attention.
Furthermore, the FCA also referred to its September 12, 2017 warning for consumers regarding the risks of ICOs. This shows that the FCA is also not going to ignore, any time soon, the potential for cryptocurrencies to be used for illegal purposes.