Crypto Crackdown – Or Tinkering Around The Edges?

Regulation of cryptoassets has long been near the top of the UK's regulatory agenda.  Despite only being a few weeks in, 2022 has already seen what are, perhaps, the most drastic proposals for regulation yet: a three-fold process, under which first, the UK Treasury wants to bring cryptoassets within the remit of the Financial Conduct Authority's (“FCA”) rules governing financial promotions; second, restrictions are applied to the types of consumers that can be targeted for investment; and third, tightening up how promotions are allowed to work in practice.  This new regime is outlined in a Consultation Paper (the “Paper”) published by the FCA on 18 January 2021.

But is the crackdown all it's cracked up to be?  Despite the FCA's stated position that it wants to help the nascent industry flourish and avoid unnecessarily restrictive regulation, there is a real risk that the new rules could suffocate the market while simultaneously failing to address the