According to CoinDesk, non-fungible token (NFT) providers in the UK may need to register with the Financial Conduct Authority (FCA) even after the government introduces a new authorization regime for the industry. The Treasury issued a consultation on money laundering regulations, stating that NFTs are unlikely to be covered by the rules for financial services, which will have a separate authorization regime. The deadline for responses is June 9.
Last year, the UK government announced plans to bring crypto exchanges and custody providers into the new crypto authorization regime. Currently, these firms must be registered with the FCA, which covers money laundering and terrorism financing safeguards, to operate in the country. Once the new regime is implemented, this will no longer be necessary. However, crypto assets not used in relation to any regulated financial services, such as NFTs, are likely to fall outside the regime, according to the consultation.
NFTs are unique tokens tied to the blockchain that usually represent an asset like art. The Financial Services and Markets Act, passed last year, paved the way for crypto to be treated like a regulated financial activity. In a consultation response from October, the government said NFTs 'were not appropriate for regulation as a financial service.' They would fall within the financial services regime only if used for regulated activities. The number of firms that may need to get registered may 'widen as the industry continues to develop,' the new consultation document said. The UK government is seeking responses on the proposed regime by June 9.