The following Financial Services guidance note provides comprehensive and up to date legal information covering:
One of the hurdles in relation to understanding non-traditional currencies and assets lies in the inconsistent use of language. Regulators and tax authorities, as well as commentators, refer variously to digital currencies, virtual currencies, cryptocurrencies, and crypto tokens, and it is not always clear whether they are using the terms interchangeably or with the specific meaning of each in mind. This Practice Note notes that there are subtle differences between a virtual currency, a digital currency, a cryptocurrency and a crypto token. The definitions used in this Practice Note largely derive from the European Securities and Markets Authority’s (ESMA) Securities and Markets Stakeholder Group’s (SMSG) October 2018 Own Initiative Report on Initial Coin Offerings and crypto-assets (the SMSG Own Initiative Report) and the Financial Conduct Authority’s (FCA) consultation paper CP19/3: Guidance on crypto-assets published on 23 January 2019. On 31 July 2019, the FCA published policy statement PS19/22: Guidance on crypto-assets which responds to CP19/3 and sets out the FCA’s Final Guidance. For more information about PS19/22, see Practice Note: UK and EU financial regulation of crypto-assets—Treatment of crypto-assets in the UK. Common terms derived from the SMSG Own Initiative Report and FCA guidance include:
crypto-assets: In the SMSG report, the term ‘crypto-asset’ is used as a generic term for cryptocurrencies, virtual currencies, virtual assets and
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