UK gains new crypto regime

As of 30 September, crypto firms operating in the UK can apply for authorisation from the FCA. The authority says its full system of regulation for crypto will include standards covering consumer protection, safeguarding, market integrity and financial resilience.

Firms will need to show that they meet the FCA’s requirements in these areas and will not automatically receive authorisation. The goal of the new regime is to create a trusted market for crypto that encourages investment and provides clarity and legitimacy to market actors.

Any firm that wishes to continue operating in the UK needs to apply for authorisation by 28 February, as the new regime will be in force from 25 October. The FCA will support applicant firms through discussions and webinars.

On the same day as the FCA announced the new regime, class action boutique KP Law announced that more than 1,000 people in England and Wales had joined a mass claim against crypto trading platform Binance and its founder.

The consumers traded cryptocurrency on the Binance platform and allege that it sold high-risk derivatives to UK-based users without authorisation from the FCA. They argue that in offering the derivative products to consumers in England and Wales, Binance breached the Financial Services and Markets Act 2000.

KP Law – which is lead counsel on the claim – says the action covers leveraged tokens, a type of derivative that gives traders leveraged exposure to certain cryptocurrencies without having to manage margin requirements, as well as futures, options and margin trading.