Solving the crypto-crossword: UK developments in the legal and regulatory treatment of cryptoassets

Indeed you might think of ‘crypto’ as a pun: both advertently referring to the use of cryptography, and inadvertently referring to the cryptic nature of these assets which have proved notoriously difficult to classify. Throw in associated technologies and concepts such as distributed ledger technology, blockchain and smart contracts, and the world of crypto can be pretty difficult for the lay-person to get their head around.

This may be one reason that, although the era of cryptoassets and related technologies has long been predicted, it is yet to go fully mainstream. So are we getting any closer to solving this crypto-crossword? Well, it is fair to say that we don’t have all the answers yet but a few clues at least started to emerge in 2019. In particular, the publication of regulatory and other guidance is a start in laying down the legal and regulatory foundations on which the market confidence, necessary for wider take up of cryptoassets, DLT and smart contracts, can be built. Most notable among these were: the Financial Conduct Authority’s Final Guidance on Cryptoassets (PS19/22); and the UK Jurisdiction Taskforce’s Legal Statement on Cryptoassets and Smart Contracts.

This article, written by Oliver Rule along with Mohamed Sacranie, summarises the key points coming out of those developments as well as highlighting some of the areas where greater clarity would be useful.