Crypto to be Regulated by the Financial Services and Markets Bill

There’s promising news for the UK crypto industry as at the end of October, Parliament’s lower house – the House of Commons – agreed to regulating cryptocurrency as financial instruments and products under the Financial Services and Markets Bill.

The taxation of crypto assets has been a grey and complicated area for too long, and so this promising news is the first step towards real financial regulations for the crypto industry.

Cryptocurrency and the Financial Services and Markets Bill

Currently a drafted proposal, the Financial Services and Markets Bill is set to provide better financial regulations and services post-Brexit. During October’s review, the House of Commons discussed the bill in detail and considered various amendments, such as the addition of cryptocurrency as regulated financial instruments.

Their vote to regulate cryptocurrency is a very promising change for the future of the UK crypto industry as not only will it provide clearer and more structured directives, but it will also create an opportunity for cryptocurrency to be adopted more broadly.

The proposal to include cryptocurrency was brought forward by MP Andrew Griffith, who said: “The substance here is to treat them [crypto] like other forms of financial assets and not to prefer them, but also to bring them within the scope of regulation for the first time.”

The MP also commented that the new addition (clause 14) to the Financial Services and Markets Act 2000 “clarifies that crypto assets could be brought within the scope of the existing provisions” and that “The Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities.”

But we’re not there yet

Although this comes as very welcome news (especially with a pro-crypto PM at the helm!), there is still a long way to go before this regulation could become law. The bill will need to be passed to Parliament’s upper house – the House of Lords – for approval, before it then needs to be given the seal of approval from King Charles.

Unsure if you’ve paid the right amount of crypto tax?

At least for now, the taxation of cryptocurrency remains a minefield, and so it can be extremely difficult to know whether you’ve paid the right amount of tax. If you’re uncertain or you’d like some further help and guidance, please don’t hesitate to get in touch with our friendly and knowledgeable accountants who will go through everything with a fine-tooth comb, ensuring that you’re fully tax compliant and that you’re taking full advantage of any applicable allowances.