This week the UK’s HM Treasury amended the law to exclude cryptocurrency staking from the definition of a collective investment scheme (CIS) or fund, to avoid the need for onerous compliance obligations. On 8 January it published a statutory instrument to implement the change, which becomes effective at the end of the month.
In the crypto ecosystem, the term ‘staking’ is often used very loosely and in some cases simply involves locking up tokens for a specific time period. The UK legislators were wise to this, so it states that “’qualifying cryptoasset staking’ means the use of a qualifying cryptoasset in blockchain validation.” The rest of the text notes that it doesn’t have to be a blockchain, so a DLT or similar network would qualify.
Meanwhile, the current UK government which took office in July is sticking with the supportive but cautious approach to blockchain and cryptocurrency of the former one. One exception is that previously the plan was to introduce legislation for certain topics as it became available. Stablecoin legislation was expected imminently, but the government wants to give the space more room for innovation. It currently plans a Big Bang-style approach, so the new crypto regime will go live during 2026. For now UK crypto legislation only covers marketing and AML/KYC compliance.
In mid-December the Financial Conduct Authority (FCA) published a policy roadmap with a timetable and a discussion paper on crypto-asset admissions and disclosures and market abuse regimes.
Hat tip to Bill Hughes for highlighting the change
