The UK is in the midst of a consultation on digital assets and regulation.
Beginning in October 2027, the UK Financial Conduct Authority (FCA) will add crypto to its remit. The consultation covers topics like issuing a qualifying stablecoin, operating trading platforms, dealing and arranging deals in qualifying cryptoassets, safeguarding cryptoassets, staking, and more. The deadline for feedback on the consultation is June 3rd.
At the same time, the US is seeking to enact crypto market infrastructure legislation (the CLARITY Act), and the Securities and Exchange Commission (SEC) is issuing guidance and updating rules where they already possess oversight.
Recently, the SEC provided clarity on whether certain Apps or platforms that enable crypto transfers and purchases should be regulated as broker-dealers. In a move that pleased the digital asset industry, the SEC said these “wallets” and other platforms are not to be regulated as a broker.
The UK, on the other hand, seems to be taking a more stringent approach. According to Lee Schneider, a crypto OG who is GC at Ava Labs, the proposed “FCA framework risks collapsing it.”
Schneider explains that while the SEC defines intermediation (like a broker) as performing specific functions. The FCA defines intermediation as “any presence in [a] transaction process.”
Clearly, the Brits are applying a far broader definition, something Schneider believes will undermine digital asset innovation in the UK.
“Under the SEC approach, neutral interfaces can remain infrastructure if they are: • user-directed • objective • non-discretionary. Under the FCA approach, those same interfaces risk becoming ‘arranging.”
Schneider declares:
“The SEC framework preserves the line between infrastructure and intermediaries. The FCA framework risks collapsing it. As [we] emphasize: the nature of the activity matters. We urge the FCA to abide by this principle.”
The SEC, under the leadership of Chairman Paul Atkins, has guided the regulator to support digital asset innovation. It appears the FCA may be placing the UK at odds with the world’s largest financial market.
