UK Treasury Confirms Crypto Staking Exempt from Collective Investment Scheme Regulations
The UK Treasury has amended the Financial Services and Markets Act 2000 to clarify that crypto staking is not classified as a “Collective Investment Scheme” (CIS). This amendment takes effect on January 31, 2025.
Key Points
- Crypto staking involves locking cryptocurrency for transaction validation in Proof-of-Stake networks like Ethereum and Solana.
- Staking rewards are earned through additional tokens, essential for network security.
- The Treasury distinguishes staking from CIS, which involves pooling funds for investment with profits shared among participants.
- CIS requires regulation by the Financial Conduct Authority (FCA), while staking arrangements do not.
- This decision promotes a decentralized approach without strict traditional financial rules.
- The amendment aligns with the UK's strategy to create a supportive regulatory framework for crypto, similar to the EU’s MiCA regulations.
Industry experts have welcomed this change, emphasizing its importance for blockchain innovation and cybersecurity.