The Financial Conduct Authority (FCA) is hosting a two-day CryptoSprint on 10 and 11 May, exploring how the evolving world of cryptoassets could be regulated within the UK.
The aim of the event is to increase understanding of emerging cryptoasset technologies and any of the regulatory limitations requiring further consideration, while ensuring support beneficial innovation and mitigate risks to market integrity and consumers.
What is a CryptoSprint?
Unlike a TechSprint which is focused on developing solutions to regulatory problems, the CryptoSprint is focused on informing regulatory policy changes based on evolving technologies. The FCA want applications from innovators, academics, regulators, technologists and subject matter experts who will collaborate intensively to help inform future policy decisions in a safe and inclusive way. They also welcome applications from non-technical leaders from the financial services industry.
The FCA will work on three specific problem statements to explore the challenges facing the industry and provide an opportunity to collaborate on policy developments.
This is the first time they are gathering views from industry in this format. The FCA sees this as an excellent opportunity for organisations across the financial services ecosystem and beyond to work with them to help inform policy.
Throughout the Sprint, teams will focus on the following three problem statements, which cover some of the key stages in the lifecycle of cryptoassets:
How should information relating to issuance of cryptoassets be disclosed to investors? Specifically:
- What eligibility criteria (if any) should exist for cryptoassets to be traded on a UK cryptoasset exchange? Who should determine and ensure compliance with such criteria?
- What information should be provided to potential buyers of cryptoassets? Who should provide this information, check its compliance and what form(s) should it take?
- At what stage (e.g. asset issuance/creation, admission to trading on a cryptoasset exchange/platform) and with what frequency (e.g. at specific events, on a continuous basis) should such information relating to a cryptoasset be disclosed/published?
How do the FCA identify (and test) where regulatory obligations on centralised and decentralised cryptoasset models should be placed? These should enable regulators to balance capturing relevant activity that poses a risk to UK consumers and markets now and as the sector evolves, whilst still enabling beneficial innovation.
What gaps need to be addressed in the UK’s exisiting custody regulatory framework for custody of cryptoassets to help protect UK consumers and markets? Specifically:
- a) How do crypto custody business models differ from traditional custody models?
- b) How are clients’ ownership rights of cryptoassets evidenced and protected, particularly in the event of a custodian or wallet provider going into an insolvency process?
- c) What safeguards should be introduced to help prevent misuse or loss of private keys, including over the use of hot and cold wallets?
Who should attend?
The FCA would like a mixture of different industry experts who can dedicate their time over the full two days of the event. Below is a list of the type of experts we would like to see on each team.
Please note that this list is not exhaustive, and the event is not limited to the below:
- Crypto specialists (including trading venues, custodians, providers and firms)
- Regulated financial institutions
- Professional advisers (including accountants, law firms, consultants and insolvency practitioners)
- Consumer bodies
What role can you play?
The CryptoSprint will require a mix of different roles in order to collectively work towards informing UK policy proposals.
- Visionaries– thinking outside the box to design innovative solutions that challenge the status quo
- Challengers– playing devil’s advocate to make sure all aspects are being considered
- Reporters– keeping the ‘room’ updated on your progress via the digital sandbox
- Pitchers– your team’s Pitcher will deliver the four-minute pitch at the end of the Sprint – no pressure! Nominated by the team, this should be someone who is a strong public speaker and can sell good ideas.
Throughout the Sprint you may be expected to play different roles to get the most out of your team.
The FCA has limited places available and require a diverse range of participants in each team. Therefore all interested applicants should apply before 20 April application deadline. They will notify you via email by 27 April to confirm if you have been offered a place.
Successful applicants will be automatically registered for a pre-event ‘bootcamp’ on 5 May from 10:00 – 11:30, where the FCA will outline what to expect at the Sprint and answer any questions. This will also be available to watch on demand. Further details can be found on the agenda tab.
To get the most value from the event the FCA encourage participants to attend in person. However, they will provide an opportunity for participants to attend virtually where in-person attendance is not possible.
30 Euston Square
London, NW1 2FB
Apply for your place by 20 April 2022
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At LS Consultancy, our consultants are industry experts that interpret the rules, regulations and spirit of the industry guidelines by assisting you “the client” in implementing a compliance programme that you can be confident is mitigating the risk of financial crime and providing crypto support. What we can do:
- We analyse the relevant jurisdictions legislation, regulation and industry guidance to ensure that your controls adopt the highest standard possible
- Analyse and/ or Enhance your Business Wide Risk Assessment to ensure we consider money laundering and relevant predicate crimes
- Assessment of your Customer Onboarding and/ or Periodic KYC reviews rely on independent documentation and supported by credible information from your customer – as this is key to your compliance programme.
- Robust Transaction Monitoring and Screening whilst utilising your up-to-date KYC documentation/ information are fundamental.
- Greater emphasis on training – why not go through live examples with your RM’s, Operational Teams and Compliance – discuss the areas of concern and come up with compliant solutions.
- Ensuring your Compliance Monitoring Programme is conducted on a regular basis
- Engagement with senior management through relevant committees
For further information please contact us where our industry experts will be happy to answer your questions.
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