The UK Treasury has revised the Financial Services and Markets Act 2000 (FSMA) to exclude cryptocurrency staking from the scope of collective investment schemes. According to the revision, the staking of Ethereum (ETH) and Solana (SOL) will only be recognized as a blockchain validation process and will no longer be subject to the relevant regulatory requirements of collective investment schemes. This revision will take effect from January 31st.
Previously, due to the unclear regulatory definition, cryptocurrency staking could be classified as a traditional collective investment tool, requiring compliance with stricter FSMA regulations. This revision explicitly states that staking is the act of participants locking up crypto assets to validate transactions and secure the blockchain network, which is different from the nature of traditional investment tools. Therefore, it requires a specialized regulatory framework.
Bill Hughes, an attorney at Consensys, supports this revision, seeing it as an important development for the industry. He emphasizes, “The operation of blockchain is not an investment scheme but a mechanism for network security.” Hughes points out that the UK traditionally adopts strict regulatory measures for collective investment schemes, and including cryptocurrency staking within them could severely restrict industry development.
This revision provides regulatory clarity for businesses and individuals engaged in cryptocurrency staking, allowing them to operate more flexibly without the compliance burden of collective investment schemes. Additionally, this measure is in line with the overall strategy of the UK to promote innovation in the crypto industry. The UK government announced in November last year that it would develop a new regulatory framework for stablecoins and staking to support technological innovation and ensure the UK maintains a leading position in the global crypto competition.