What is the new crypto law in the UK?
The UK’s Financial Conduct Authority (FCA) consumer research found that around 12% of UK adults owned cryptocurrency in 2024, up from 4% in 2021[1]. This strengthened the governments rational for updating the law on this area.
Current law:
Currently, the Financial Conduct Authority has a large role in regulating cryptocurrency in the UK. They have rules ranging from cooling periods to risk warning requirements. To extend on this, the UK government have been steadily taking actions that will ultimately shape the law on cryptocurrency going forward. An impactful example of this was the Ministry of Justice’s consultation commissioned by the Law commission as to whether the UK ought to increase the legislation on cryptocurrency. The general consensus is that these currencies should be brought into financial legislation.
Changes to expect:
You may need to declare certain information and pay capital gains tax because of the law that is being developed.[2]
Cryptoasset Reporting Framework is also due to take effect soon. This will require crypto service providers to complete a mandatory registration, report certain information annually and potentially face fines for non-compliance. This framework is a result of an international consultation back in 2021 of which implementation was later given board approval by the UK in May 2024. This is due to come into force on 01.01.2026 and so the effects are yet to be seen.
Changes still to come:
The Property (Digital Assets etc) Bill[3] proposes to confirm the status of non-fungible tokens, carbon credits and cryptocurrency as property. Currently the law recognises two types of property, being ‘things in possession’ and ‘things in action’, neither of which are applicable to cryptocurrency. For this reason, the aim is to introduce a third category of property ‘thing’ which will act as a ‘catch all’ with the specific intention of including digital assets such as cryptocurrency. This allows greater protection from infringement of rights to do with this property.
This bill is still being passed through Parliament and so we do not know when or if it will become law as well as how much it could change by the time it becomes law. This will be an interesting change to see when something eventually comes into effect.
Summerfield Browne Solicitors can assist you with understanding and protecting your legal rights when it comes to cryptocurrency.
[1] New cryptoasset rules to drive growth and protect consumers - GOV.UK
[2] Information you'll need to give to UK cryptoasset service providers - GOV.UK
[3] UK: Property (Digital Assets etc) Bill set to become law | Eversheds Sutherland
