NFT Providers in the United Kingdom Might Be Required to Register with the Financial Conduct Authority

Non-fungible token (NFT) providers in the United Kingdom may be required to register with the Financial Conduct Authority (FCA), CoinDesk reports, even after the government implements a new industry-wide authorization regime. In a consultation regarding money laundering regulations, the Treasury expressed skepticism that NFTs would be subject to the regulations governing financial services, given that the latter will be subject to a distinct authorization regime. The response deadline is June 9th.

The British government announced last year that it intended to incorporate cryptocurrency exchanges and custody providers into the new crypto authorization regime. At present, the FCA, which regulates safeguards against money laundering and terrorism financing, mandates the registration of these companies in order for them to conduct business within the nation. After the implementation of the new regime, this will become unnecessary. The consultation indicates, however, that crypto assets not utilized in connection with regulated financial services, such as NFTs, are likely to be exempt from the regime.

NFTs are blockchain-linked, one-of-a-kind securities that typically represent an asset such as artwork. Passed the year before, the Financial Services and Markets Act paved the way for cryptocurrencies to be regarded as regulated financial activities. The government stated in an October response to a consultation that NFTs "were not suitable for regulation as a financial service." For them to be classified under the financial services regime, they must be utilized for regulated activities. The new consultation document stated that "as the industry continues to develop," the number of businesses that may be required to register may "expand." The government of the United Kingdom requests comments on the proposed regime by June 9.