Looking over the global crypto landscape, it seemed recently as though the UK wasn’t keeping pace with other regions. In the US, the SEC finally approved spot Bitcoin ETFs, and the new products have enjoyed an explosive start, demonstrating sustained demand and impressive volumes.
There is anticipation also for similar ETFs in Hong Kong, and on the regulatory front, the EU appears to be moving quickly, having already created a bespoke package of crypto regulation called MiCA.
✅ BREAKING: U.S. Bitcoin ETFs had RECORD inflows today, primarily due to $IBIT ’s record flows 👇 pic.twitter.com/7ZQcN9Jw52
— HODL15Capital 🇺🇸 (@HODL15Capital) February 29, 2024
Meanwhile, over in the UK, it’s been an uncertain picture with mixed messages, as among promises from some politicians of an innovative approach, regulatory clarity is yet to emerge, and there appears to be a risk that crypto enterprises might choose to look elsewhere for welcoming locations in which to do business.
However, amid the ambiguity, a positive signal has flashed, with London-based trading platform OANDA Crypto launching for business in the UK. As the name suggests, the OANDA Crypto exchange is an offshoot of the US-based, globally-operating brokerage firm OANDA, which already operates a crypto arm in the US in collaboration with stablecoin issuer Paxos.
Regulatory compliance has become a key concern for companies wishing to operate British crypto services, and in OANDA’s case, its entry into the UK crypto market was enabled through the acquisition, last August, of a majority stake in British crypto firm Coinpass, which is itself registered with UK regulator the Financial Conduct Authority (FCA.)
The new launch stands out as it’s occurring at a time when several crypto-native platforms (including major names Kraken and Binance) have been pausing or limiting their services for UK-based users due to concerns about compliance with FCA crypto rules.
However, in the case of OANDA and Coinpass, it appears that dealing with the FCA and offering crypto services to UK users are viable prospects.
10 Points to Abide by the New Rules
New Laws Within Six Months?
All in all, it’s a mixed picture in the UK, especially when it comes to assessing the overall intentions of the authorities towards the crypto industry. At the same time, though, we now have OANDA Crypto moving decisively and in full compliance with those authorities, and in a further positive development, meaningful attempts to clear up the rules and, in the process, define a long-term strategy, may soon be on the way.
Earlier this month, the UK’s Economic Secretary to the Treasury, Bim Afolami, indicated that the government is in a hurry to get its guidelines on crypto fully in place and operational when he stated publicly, with reference to creating legislation around stablecoins and crypto staking,
“We want to get these things done as soon as possible. And I think over the next six months, those things are doable.”
Certainly, the crypto world is moving fast at the moment, and after the crashes and collapses of 2022, when FTX went bankrupt, followed by 2023’s rapid recovery, which was impressive, but during which mainstream attention was elsewhere, 2024 is now taking on a markedly different, and far more bullish, character.
With that in mind, the pressure is now on regulators to have constructive crypto strategies in place.
FCA Demonstrates Commitment to Advertising Enforcement
As for how the FCA is regulating crypto in the UK right now, new rules around promotion came into effect last October, which distinguish crypto assets from regular high-risk investments, and categorize them instead as “restricted mass market investments”, with close controls on the ways they can be marketed.
Subsequently, according to an FCA report published earlier this month which presents data from 2023, the FCA has–since new regulation came into force through to the end of 2023–issued 450 consumer alerts with regards to crypto firms breaching promotional regulations and brought about the removal from app stores of 35 crypto products.
New @hmtreasury and FCA papers set out new rules for the #marketing of #cryptoassets relating to the financial promotion regime. @CMS_law’s article is a good overview of the changing guidance and how new #regulation will impact UK firms https://t.co/pTsM701NeO
— Greengage (@GreengageCo) January 26, 2022
Additionally, the FCA has spoken of creating what it terms “positive frictions” for users of crypto platforms, with, for example, those who want to trade crypto required first to effectively pass a test by correctly answering a series of crypto-related questions.
However, there have been anecdotal complaints from users claiming to be seasoned traders, who were baffled by what they saw as unexpected quizzes, and on the whole, there are questions about how this approach aids in optimally positioning the UK as a serious contender in the crypto industry.
After all, a constant area of focus among those working in crypto is on how to remove friction from the crypto experience and ease participation for newcomers, and as such, it may be disconcerting to witness initiatives to deliberately place bumps in the road while at the same time hearing from politicians (up to and including Prime Minister Rishi Sunak) that Britain can become a Web3 frontrunner.
Ultimately, then, while news of OANDA Crypto’s UK launch comes as a welcome indicator that Britain is a place where crypto firms can operate, the need for a consistent approach from the authorities remains in the background.
