UK Updates Law to Exempt Crypto Staking from Strict Rules
The UK government has revised its financial regulations to exclude cryptocurrency staking from the scope of the Collective Investment Scheme (CIS), which is heavily regulated.
Treasury’s updated framework provides legal clarity for staking Proof of Stake Blockchain is like Ethereum and Solana.
Cryptocurrency staking has new legal precedent in UK
a new one Order Bills published on January 8 amend the Financial Services and Markets Act 2000. It stipulates that arrangements involving “qualified crypto asset pledges” do not constitute CIS.
The term refers to the use of a blockchain-based network or similar technology to verify transactions. The revised regulations will take effect on January 31, 2025.
Under UK law, a collective investment scheme includes any group investment arrangement, such as an ETF or mutual fund, in which participants share profits or income.
These schemes are highly regulated by the Financial Conduct Authority (FCA) and require registration, authorization and ongoing compliance by an approved administrator. The new amendment ensures Staking activity does not fall within this strict framework.
The order is in line with the UK Treasury’s wider plans to regulate cryptocurrencies. In November 2024, Economy Minister Tulip Siddiq announced that draft regulations covering cryptocurrency staking services, stablecoins and other cryptocurrency activities would be ready by early 2025.
in addition, final regulatory frameworkincluding the rules of the trading platform and Crypto lendingexpected to be by the first quarter of 2026.
Ongoing challenges facing the FCA
Despite some recent progress, the FCA still faces obstacles in enforcing compliance in the cryptocurrency industry.
In 2024, the agency received 1,702 requests to remove illegal cryptocurrency adsbut only 54% took action. The FCA has yet to impose penalties on companies that fail to comply, raising concerns about the effectiveness of its enforcement measures.
Additionally, the UK saw several notable cryptocurrency-related controversies in 2024.
TikTok faces FCA scrutiny It is suspected of running an unregistered cryptocurrency exchange through its virtual currency system, which compliance experts believe could lead to unregulated financial transactions.
In addition, the meme currency platform based on Solana Pump.fun banned for UK users After receiving a warning from the FCA.
The Treasury Department’s move to address regulatory gaps reflects the government’s interest in balancing innovation with investor protection as the cryptocurrency industry continues to grow.
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