Last week, several U.K. agencies that make up the Taskforce sought to change crypto game rules. New tax policies, potential prohibition of several trading instruments and other changes might take effect in the coming months.
The U.K. Cryptoassets Taskforce announced the proposal of changing crypto game rules when it comes to crypto business types. Also, the Financial Conduct Authority (FCA) stated that a ban on crypto derivatives is possible next year. Lastly, the Taskforce group proposed a new tax policy for blockchain companies.
Crypto Game Rules Changes Inevitable
On October 29, the main crypto regulative body made an announcement regarding the blockchain industry. The U.K. Cryptoassets Taskforce stated that crypto game rules need to be changed. Thus, the Bank of England and the Financial Conduct Authority (FCA) released a report on new blockchain business types. Due to the lack of clear crypto game rules, the Taskforce saw the need to separate different blockchain organizations.
The group defined three crypto assets, including exchange, security, and utility tokens. The report proposed a change of current tax policies, even though the topic remains to be outside of Taskforce’s jurisdiction. Separate tokens would hold different rates. This would depend on the volume and value used by the crypto businesses. New tax regulation would affect the crypto game rules, especially ICOs and trading platforms.
Also, the Taskforce proposed a ban on crypto CFDs, futures, options, and transferable securities due to issues with security. The Bank of England, Her Majesty’s Treasury (HMT) and the FCA worked on the report. They came to the conclusion that Contracts for Difference (CFD) and similar instruments might face a ban due to high levels of risk. The prohibition also aims to reduce the number of illicit activities in the crypto industry, enforcing new crypto game rules.
Warnings for the U.K. Crypto Future
Although the report stressed the importance of innovation, a few organizations have warned the U.K. government that the regulation is too strict. A joint announcement by the British Business Federation Authority (BBFA), Novum Insights, and TodaQ warned that overly strict regulation can have a negative effect on the industry. The Taskforce’s new crypto game rules changes might suffocate platforms and decrease interest in the blockchain solutions.
The regulation within the U.K. might produce effects opposite of those expected by the authorities. The anti-money laundering (AML) policies should protect clients from frauds within the ICOs and CFD sectors. However, too strict crypto game rules might push new entrants off the market. Thus, many of the crypto organizations would move their operations outside of the U.K.