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Cryptopolitan 2025-01-10 05:15:01

UK Treasury exempts crypto staking from “collective investment scheme” rules

The UK Treasury has announced that the proof-of-stake mechanisms underlying certain blockchains, such as Ethereum and Solana, will not be considered collective investment schemes(CIS). This is a good development for crypto since CIS is heavily regulated. The order from the Treasury amends part of the Financial Services and Markets Act 2000, which concerns group investments. It clarifies that “arrangements for qualifying crypto asset staking do not amount to a collective investment scheme”. The order, which will take effect on January 31, states that “qualifying crypto asset staking” means authenticating contracts on the blockchain, a distributed ledger technology network, or “other similar technology.” Blockchain technology operations present a cybersecurity issue According to Bill Hughes, director of global regulatory matters and Consensys’ lawyer, the amendment is a good development for crypto staking because there are strict regulations on managing and promoting CIS. He added that the way blockchain operates shouldn’t be construed as an investment but rather as cybersecurity. Good news frens. It looks like that, by the end of the month, proof of stake mechanisms underlying certain blockchains (e.g. #Ethereum #Solana ) will not be considered collective investment schemes under UK law. This is a good development because the management and promotion of… pic.twitter.com/JJgEO5rmPP — Bill Hughes : wchughes.eth 🦊 (@BillHughesDC) January 9, 2025 The UK categorizes collective investment schemes as any disposition where participants earn profits or income, including investment funds and exchange-traded funds (ETFs.) The Financial Conduct Authority takes its mandate very seriously in regulating CIS. Before venturing into collective investment schemes, one must register and get authorization. Also, agency-approved monitors will continuously check the ongoing compliance commitments. Staking is a process that allows network participants to earn rewards by locking their native coins to validate transactions in blockchains such as Ethereum and Solana. UK takes a step towards achieving a crypto regulatory framework In November 2024, the Treasury promised to deliver a crypto regulatory framework by early 2025. The latest order appears like a headstart towards the Treasury promise. “For me, it doesn’t make sense for staking services to have this treatment. The government intends to proceed with removing this legal uncertainty accordingly.” – Tulip Siddiq In the same period, Tulip Siddiq, economic secretary to the Treasury, informed a London conference that the framework would cover staking services, stablecoins, and crypto. The local crypto industry had advocated against crypto staking being included as a collective investment scheme because of the strict regulations, and Siddiq agreed. A Step-By-Step System To Launching Your Web3 Career and Landing High-Paying Crypto Jobs in 90 Days.

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