The British Financial Conduct Authority (FCA) has published updated guidelines for the regulatory Status quo of Bitcoin & co. The financial Supervisory authority has taken into account the feedback from market participants, who have participated in one in January, started consultation. Pure crypto-exchanges can relax accordingly, as well as the issuers of Utility tokens, which do not meet the Definition of E-money.

By Christopher clover
At the 1. August 2019BTC$10.028,00 0.76%part Facebook Twitter LinkedIn xing mail

presented by The British financial Supervisory authority FCA has new guidelines for the regulation of Bitcoin & co. The FCA clarifies the (crypto-)market participants, among other things, about which Token types of Utility Token to the Security Token of a regulation are not affected and which are not. The publication of the position paper has gone a months-long consultation process by industry members of the authority were able to communicate their questions and suggestions.

In the previous consultation paper, the FCA between three different classes of crypto-Assets: Exchange Token Utility’s Token and the Security difference Token.

„pure“ crypto-currencies [the“Exchange Tokens“]

crypto-Token, whose function consists exclusively in its use as a payment means, do not fall within the remit of the FCA. It is important, among other things, that there is no Central Issuer and from the possession of the Token has no (enjoyment of)rights are attached.

Good, if also not new news for pure crypto-exchanges, because:

This means that market participants, such as crypto-exchanges, a platform for trading with exchanges-provide tokens (such as Bitcoin), that is outside of our remit, lie.

A majority of the respondents to this assessment, the FCA announced. Some have, however, expressed concerns with regard to consumer protection. For others, moreover, the need for clarification in the question of how the FCA is pure crypto-different currencies the Utility Token.

the FCA is well aware of the fact that the vast majority of crypto-currencies on the secondary market with a speculative intention are traded. This fact alone will make Bitcoin & co. however, no investment within the meaning of the FCA Definition of a „Specified Investments“.

We are not aware of the fact that Exchange-tokens are purchased rather for speculative purposes and held [[…]We consider this to be sufficient, in order to exchange brands represent a [[…]investment. The analogy would be a Person, the different currencies, Fiat or a goods holds, both of which are unregulated, in the hope of making a profit.

Utility Token: FCA patches to

As a Utility Token, the FCA defines the crypto-Token, the „grant the holders access to a current or potential product or a service“, without the owners but with the same rights normally associated with investments, as defined by the FCA.

The FCA, however, emphasizes that Utility Token be able to meet the Definition of E-money and, thus, a regulation could be:

Although Utility-tokens are not a specified investment, they can meet under certain circumstances, the Definition of E-money (as well as other Token). In this case, the activities in question can be regulated.

Even this Definition is met in a majority of the respondents. Three out of four Respondents of the view of the FCA stated that only Utility tokens, which act as E-Money, in need of regulation. Here, too, there were some doubters, the call for a General regulation of Utility Token.
The FCA has heard the Calls for a clearer distinction of the Utility Token from the Exchange Token, and – at least a little – the definitions of the consultation paper is improved.

On the basis of the answers, we will proceed with the consulted guidelines and make Changes in order to make the distinction between the categories of crypto-Assets clear.

The new taxonomy of the FCA distinguishes between Security tokens, E-Money tokens and non-tokens.

Security Token

The authority follows the widespread Definition of a Security Token as a digital securitised securities. You grant to their holders rights that are comparable to those of an investment in a classic value investment.

among the Security-Token Token, grant the holders of a part or all of the shareholders or debtors of the transferred rights, as well as tokens granting rights to other tokens, which are themselves a specified investment. [[…]ecurity Token are securities, because they grant certain rights in connection with traditional securities.

Security Token, one may imagine it already – fall also in the domain of the FCA as a Token, which meet the Definition of E-money.

FCA sees crypto-derivatives-critical

While the FCA, in terms of pure Exchange and Utility Token without E-money character sees no need for immediate action, the authority at the beginning of the month a ban of derivatives with a crypto-reference in views. Including contracts for difference, binary options and futures transactions will fall, among others.

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