WhenBritish Regulators Were Forced to Suspend the Cryptoasset Registration Scheme
The Financial Conduct Authority (FCA) of the United Kingdom found itself in an unprecedented position in early 2023 when a High Court judgment compelled it to suspend its newly introduced cryptoasset registration programme. This article examines the background, the legal dispute, the immediate fallout, and the wider ramifications for the UK’s financial regulatory landscape And it works..
Introduction
In early 2023, the Financial Conduct Authority announced a mandatory registration scheme for firms dealing in cryptoassets, aiming to bring the rapidly growing sector under a clear supervisory framework. On the flip side, within weeks the High Court ruled that the FCA’s rules were ultra vires – beyond its statutory authority – and ordered the regulator to suspend the scheme pending a proper legal review. The move was hailed by many as a step toward consumer protection and market integrity. This decision highlighted the delicate balance between fostering innovation and ensuring reliable oversight, and it sparked a vigorous debate about the future of financial regulation in the UK.
Background: The FCA’s Cryptoasset Registration Scheme
Purpose and Scope
The registration programme, formally called the Cryptoasset Registration Scheme (CRS), was designed to:
- Require firms that provide cryptoasset‑related services (e.g., exchanges, custodial wallets, and custodial services) to register with the FCA.
- **Implement anti‑money‑
