Recently, the Financial Conduct Authority, or FCA, in the United Kingdom issued a policy statement with the title PS 20/10. This policy statement prohibits both the sale, promotion and distribution of crypto derivatives (including CFDs) and crypto ETNs, as well as basically every financial instrument that references crypto assets or has crypto assets as the underlying asset. The policy came into force on the 6th of January 2021, and this is already enforceable by the authority.
To put it simply, it means that companies or individuals will not be allowed to promote CFDs or any other financial products that are based on cryptocurrencies in the United Kingdom or to residents of the United Kingdom.
It is therefore important for Porat Group to prohibit the dissemination of any marketing materials which relate to the distribution of CFDs, as well as other products based on cryptocurrencies, addressed to UK residents for any of our clients for whom this may be relevant.
We also urge all our clients to take all actions needed (if not done already) in order to comply with this new policy statement.
Offering any crypto assets services in the United Kingdom requires registration with the FCA as of the 10th of January 2020. If you have an unregistered crypto business in the UK, we therefore strongly urge you to register it. Naturally, Porat Group can assist with the entire procedure if needed.
It is also important to note that only crypto-derivatives and crypto-ETNs which reference unregulated transferable crypto assets are caught by the ban. Therefore the ban does not include crypto-derivatives and crypto-ETNs which reference the following crypto assets:
It is therefore legal to for a company to engage in crypto exchange and custodian services within the UK (naturally pending registration with the FCA).
In general, the status of crypto assets in general in the United Kingdom has undergone some major changes recently. Porat Group’s regulatory experts will naturally continue to keep up with all major changes in this jurisdiction, as well as offer guidance to all clients active in the cryptocurrency industry in this market. We will also update our website accordingly, should there be a major change thought to be widely of interest to the industry and its players.
For more information about this new policy statement, we refer to the FCA website and their own press release on the issue. Porat Group clients naturally also contact their contact person or account manager at the firm for further questions.
For information about other services we offer cryptocurrency businesses, in the UK and in other jurisdictions, please see this page. For more about cryptocurrency regulation in general, as well as a comparison of how the UK compares to other jurisdictions that regulate these activities see this page.