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UK regulatory authority moves for clarification on cryptocurrency regulation

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UK regulatory authority moves for clarification on Cryptocurrency regulation
Source: Pixabay

The Financial Conduct Authority [FCA], the primary financial regulator of the United Kingdom released a ‘consultation paper’ on 23 January titled, “Guidance on Cryptoassets,” which aims to clarify the picture of cryptocurrency regulation in the country.

Public feedback will be welcomed by the FCA, to better gauge the regulatory requirements of the masses before their consultation phase closes on April 5, following which the regulatory authority will make a decision on the legal definition of cryptocurrencies.

Blockchain, the underlying technology that powers the cryptocurrency industry is constantly evolving and governments have to keep up with the same in order to enforce better regulation. The FCA highlighted the same in seeking regulatory clarity through this open-consultation approach.

The FCA stated:

“We are consulting on Guidance for crypto assets to provide regulatory clarity for market participants carrying on activities in this space. The crypto asset market, and the underlying DLT technology, is developing quickly and participants need to be clear on where they are conducting activities that fall within the scope of the FCA’s regulatory remit and for which they require authorisation.”

This consultation paper aims to cover cryptocurrencies as specified investments, financial instruments, E-Money, and items captured under the payment services regulations stated the FCA.

Cryptocurrencies have always operated in a regulatory grey area. This paper and the feedback it will provide will herald legal clarity and is an important step to promote fair government regulation on cryptocurrencies.

The FCA also clears the details by differentiating between “exchange tokens,” “security tokens,” and “utility tokens.” Firstly, exchange tokens, the regulatory authority specifies, includes cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others. Secondly, security tokens, include royalty streams, tokenized equity and more.

Security tokens are characterized by ownership rights, repayment clauses, and the holders may be entitled to a share in the future profits. Thirdly, utility tokens can be redeemed by the holder for seeking access to a specific product or service that is usually powered by decentralized technology.



According to the chief legal officer at Blockchain, Marco Santori, the top regulator in the UK does not have the regulatory authority over utility tokens, as they do not have the characteristics of security tokens, which are under the FCA’s purview.

A 10-week consultation period is set for the public to send in their feedback, which is set to conclude in April, following which the final text will be released by the regulator in the Summer of this year.





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Graduate of Finance and Economics, interested in the intersection of the world of decentralized currency and global governance.

Analysis

Bitcoin [BTC]: King coin’s Golden Cross confirmed; Greenspan hints at bullish market

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Bitcoin [BTC]: King coin’s Golden Cross confirmed; Greenspan hints at bullish market
Source: Pixabay

Bitcoin’s much-awaited Golden Cross, which many analysts claimed will lead to a resurgence of a bullish market, has been confirmed. The intersection of the 200-day moving average and 50-day moving average, which indicates the Golden Cross, was achieved over the past few hours.

Earlier today, the top cryptocurrency saw a massive rise after days of sideways movement. Bitcoin’s ascendance saw it break the $5,350 resistance level, which eToro’s Mati Greenspan had previously suggested will consolidate “buying pressure.”

Source: TradingView

Additionally, a major psychological level of $5,500 was also surpassed less than three weeks after Bitcoin broke the $5,000 mark.

The Golden Cross theory holds credibility among analysts in the cryptocurrency realm as it infers that the coin’s average price is above its 200-day equivalent. For the first time in over a year, the cryptocurrency market has seen its 50-day MA move above the 200-day MA, which according to many is a sign of a bullish market.

On the opposing side of the Golden Cross indicator is the Death Cross, where two indicators cross over into a bearish market i.e. the 200-day MA moves above the 50-day MA. The Death Cross manifested in April 2018, after the prices went into a free fall following the December 2017 high.

In April 2018, BTC was priced at just over $7,000, following which it lost more than 50 percent of its price by the end of the year. The price of the king coin has recovered exceedingly well in 2019 however, winning back almost 50 percent of its lost value.

Many analysts, including Greenspan, agree that the crossing of the two moving averages is a clear testament to the return of the bull market. Although he didn’t quite use those words, Greenspan tweeted,

“Ladies & Gents… The Golden Cross!
Bitcoin’s 50-day moving average (gold) crossing above her 200-day moving average (blue). 📈
This is yet another sign that we’re back in a🐂market. 🚀🌛”

However, in an exclusive interview with AMBCrypto last week, Greenspan had stated that the Golden Cross theory is a “lagging indicator,” as the Death Cross was last seen in April 2018, months after the market took a bearish turn.



In his view, the 200-day moving average is the key indicator. On April 2, Bitcoin broke this mark for the first time since March 2018, by recording a massive 17 percent daily gain and rising above $5,000.

Based on historic price changes with reference to the Golden Cross, the last time the 50-day MA soared above the 200-day MA, price of Bitcoin rose by over 8000 percent from $246 in October 2015 to almost $20,000 in December 2017. Given past market movements, the current market scenario, and the optimism in the air, the Golden Cross may just have initiated the Bitcoin bull market.





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