
In a move to support innovation and clarify crypto regulations, the UK government has announced that crypto staking will no longer be classified as a “collective investment scheme” (CIS). This adjustment, stipulated in an amendment to the Financial Services and Markets Act 2000, will exempt qualifying crypto asset staking from the strict regulatory oversight applied to CIS.
Unlike mutual funds or exchange-traded funds (ETFs) that require authorization and stringent compliance under the Financial Conduct Authority (FCA), crypto staking will not be subject to these burdens. This exemption will provide greater legal certainty for blockchain networks utilizing proof-of-stake mechanisms, such as Ethereum and Solana.
The amendment, which comes into effect on January 31, 2025, aligns with the UK Treasury's broader plan to regulate digital assets. New guidelines for staking services, stablecoins, and other crypto activities are expected in early 2025, leading to a comprehensive regulatory framework for trading platforms and crypto lending by 2026.
This adjustment follows concerns raised by the crypto industry regarding the heavy-handed application of CIS regulations, which were initially designed for traditional financial instruments like investment trusts and closed-end funds. By exempting staking from these rigid rules, the UK is attempting to strike a balance between fostering innovation and protecting investors.
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