Crypto assets

Our consultants have engaged with the development of regulatory regimes in the UK/EU as well as many other jurisdictions. They participate in numerous international crypto forums, currently contributing to the development of guidelines relating to the Travel Rule.

We have experience applying financial services regulation to novel and innovative services and seek to comment on evolving regulatory regimes for crypto assets. Whether these relate to financial crime or to prudential and conduct of business regulation.  This expertise includes a commitment to a risk based and proportionate perimeter, arguing for example for the exclusion of most NFTs from financial services regulation.

Our consultants’ involvement in the crypto space dates back to the predecessor technologies of public key cryptography, PKI and their implementations in financial services. This includes DigiCash, Mondex and early attempts to create digital bearer instruments.

At the EU level, we have advised on MiCA, covering key provisions relating to the prudential framework for e-money and asset referenced tokens, the exclusion for NFTs and the treatment of significant service providers. Currently we are focussing on the development of level II text comprising RTS, ITS, and guidelines to be prepared by the EBA and ESMA.

Tax Reporting and AML Standards

We actively commented on the OECD Crypto Asset Regulatory Framework (CARF) regarding tax reporting. Furthermore, our team supported its implementation in the EU through the revised Directive on Administrative Cooperation (DAC).

Our experts also advised on the EU AML package. This included crypto asset related provisions within the AML Regulation and the updated Fund Transfer Regulation (FTR or Travel Rule). Additionally, we provided guidance on EBA guidelines and Financial Action Task Force (FATF) recommendations.

Regarding national laws, we advised on the crypto asset service provider registration requirements across Member States under 5MLD. This work covered registration triggers, the scope of services, together with the varying regulatory and practical requirements of registration.

Within the UK, we have successfully helped clients with crypto asset registrations. We have also advised on the UK’s evolving regulatory approach to crypto assets, stablecoins and decentralised finance.

Recently, our team advised on key regulatory developments, including:

• advertising regulations such as the UK financial promotions regime planned to be introduced by the UK Financial Services and Markets Bill 2022, and
• the broader impact of Section 20 of the Financial Services and Markets Bill 2022 on crypto asset service providers.