The UK Treasury has introduced proposed amendments to the Financial Services and Markets Act 2000 (FSMA) that would exclude virtual currency staking from being classified as a collective investment scheme, with effect from 31 January.
With this change, staking will be Ethereum (ETH) and Solana (SOL) It will only be recognized as a process of blockchain validation and will not be subject to the regulatory requirements applicable to collective investment schemes.
Previously, vague regulatory definitions risked staking being classified as traditional co-investment vehicles subject to stricter FSMA regulations.
The proposed amendments make clear that staking is fundamentally different from staking, where participants lock up their cryptocurrencies to verify blockchain transactions and secure the network, and warrants a separate regulatory framework. I'm doing it.
ConsenSys attorney Bill Hughes said: welcomed the move as an important step for the industry, highlighting that UK law traditionally regulates collective investment schemes with a coercive approach that stifles growth.
He added:
“The way blockchain works is not an investment scheme. It’s cybersecurity.”
As a result, companies and individuals involved in blockchain staking have greater regulatory clarity and can operate without the burden of compliance measures designed for collective investment schemes.
Notably, this move is consistent with the UK's broader strategy to foster innovation in the crypto sector while maintaining appropriate oversight to protect market participants.
In November last year, the British government announced Regulations will be put in place to encourage regional innovation. The plan included new regulatory status for stablecoin guidelines and staking. The goal is to avoid stifling innovation or leaving the UK behind in the cryptocurrency arms race.
proprietary process
The proposed amendments explicitly acknowledge the unique nature of staking and ensure that staking is not subject to inappropriate regulatory frameworks.
The Act defines “eligible crypto assets” as crypto assets that meet the criteria specified in existing UK law to recognize these assets for regulatory purposes.
“Blockchain validation”, on the other hand, corresponds to the validation of transactions on a blockchain network or similar distributed ledger technology, often supported by a staking mechanism.
This fix is particularly relevant to important blockchain networks such as Ethereum and Solana that rely on staking for transaction validation. This change could increase added value for companies holding these assets and facilitate the provision of listed products that leverage staking in the UK.
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