The Future of Cryptocurrencies in the UK Hangs on FCA's Decision

Crypto regulations in the U.K. Up until now, the U.K. hasn't made any specific crypto-focused law, and its regulators have had a fairly lenient approach to cryptos.

The U.K. tax authority, Her Majesty's Revenue and Customs, has specified that buying and selling cryptos will be considered the same as gambling, and the individual will be subject to capital gains tax.

HMRC even requested that cryptocurrency exchanges hand over the names of their customers and transactions, aiming to identify cases of tax evasion, but the U.K.'s Anti-Money Laundering laws doesn't mention crypto specifically.

Back in July 2018, the FCA warned that cryptos pose a huge risk to consumers who are generally misinformed about them, and recommended that products such as derivatives and exchange-traded notes that reference crypto-assets were "Ill-suited" to small investors.

Even though the report recognizes that cryptos can facilitate cheaper and more efficient transactions through the elimination of intermediaries, the majority of the report portrays cryptos in a negative light.

Following the report, U.K. regulators ramped up their investigations on cryptos.

As a matter of fact, crypto investigations in 2019 have surged 74% in comparison to 2018, and the FCA reported that crypto investors in the U.K. lost over $34 million due to cryptocurrency and forex scams from 2018 to 2019.

"The decision to not have crypto investment products I feel is not the right decision but instead, the FCA should be looking to see how best to create a regulatory framework for these businesses."

"Both parties have opposing agendas and viewpoints. Even if the FCA is not ready to embrace crypto assets, it has a duty of care to ensure that if these products are available, protection is in place for consumers and investors."

Even China, which was previously one of the most hostile nations to crypto, passed its first "Crypto law," going into effect in January 2020.