With the US grappling with the idea of securing cryptocurrency, so too is the UK.

Whilst the UK is beginning to make some headway in terms of regulating and securing cryptocurrency, it is a slow process.  We are a nation of technology enthusiasts and so it would be in our best interest to invest into this area.  By offering more clarity around compliance, would define us as a major player on the global stage.

The issue is that like with so many other challenges which the UK government faces, sadly it is so often reactive rather than proactive when it comes to embracing new methodologies.

The former Chair of CryptoUK, Iqbal Gandham, pointed out in an April 2018 letter to the U.K. Parliament’s Treasury Committee that despite the fact that “the UK holds great potential to become a global leader in cryptocurrencies,” the “absence of regulatory direction” has stifled innovation in the industry.

Only last year the FCA took a review of the industry and announced that they would be the official regulatory body to securing cryptocurrency businesses who operate in crypto, by overseeing crypto-asset activity including exchange providers and custodian wallet providers.

This means that crypto-based businesses would need to successfully register with the FCA so that they may operate. Any such firms that do not complete registration by 10 January 2021 will have to cease trading.  They must also comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 otherwise known as MLR to operate.

This now provides some grounds, both in the recognition that the crypto industry is becoming accepted but also meets further criteria in terms of regulation. It is welcomed news for investors who will find that their investments will be more secure. Consequently, regulation brings higher costs and the burden of further compliance to securing cryptocurrency.  As there are still many grey areas within this industry and registration is only a starting point, the general consensus is to take advice before facilitating or investing in a crypto-business.

Is your company researching the application and operation of cryptocurrency? Here at Crendon Insurance we support technology businesses with digital technology insurance to protect their businesses. Coupled with a range of other products such as cyber attack insurance and intellectual property insurance, we tailor commercial insurance solutions to suit individual digital technology UK businesses.

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