As the United States continues to fight for regulatory clarity and guidance, other jurisdictions around the world are embracing digital assets. It’s no coincidence a16z chose the UK for their first non-US office, citing a welcoming crypto environment. The Prime Minister himself, Rishi Sunak, has expressed his commitment to crypto, making moves to turn Britain into the global blockchain hub. 

Cryptocurrency exchange, Kraken, has made sizable staffing and license investments in the UK. It’s Kraken’s second or third biggest jurisdiction, following the US. “We have one of the most, if not the most, pro-crypto governments of all the major sovereign governments. If we’re talking about the major financial centers of the world, we’re consistently seeing really positive messages from the UK government,” said Blair Halliday, Managing Director of Kraken UK. 

Halliday is an Advisory Council Member for the Digital Economy Initiative and has spent time in various compliance roles at Gemini, Circle, and JP Morgan. 

The crypto industry has been crying out for regulation. “What we can say here within the UK is we have a pathway and that’s a positive thing. We have a government that is willing to engage and have an interest in regulating crypto,” he said. 

“As a jurisdiction, we’ve gone from talking the talk to walking the walk, in relation to crypto and regulation, and getting things lined up here.” 

Cooling-off period for crypto purchases 

One such bill is the financial promotions regime for crypto assets. “What that will essentially mean is if you have a direct offering to a consumer, a cooling-off period of 24 hours will be required. This is for new customers, prior to the point when they can conduct activity with a business in relation to crypto. The crypto activity will now be moved under restricted mass market. There will also need to be an assessment piece by identifying the type of investment that’s being made,” Halliday said. 

What’s critical, Halliday added, is understanding whether offshore firms adhere to these requirements. “Consumers may go down the path of least resistance, so it’s important that firms offering services to the UK, from outside the UK, also adhere to these requirements.” Consumer protection is going to be at the heart of all this and there is going to be a degree of supervision necessary to ensure that this remains the outcome, he said. 

Halliday recalls UK’s crypto stake in the ground moment – the keynote by John Glen, Chief Secretary to the Treasury – where he stated the UK is open for crypto businesses. “That was a big turning point and up until that point, we hadn’t really heard a lot of positive messages. A lot of the dialogue was either neutral or borderline negative messaging, if not from the government, from the UK. That was the point we said we are interested in understanding the opportunity crypto presents.” 

Once Sunak came into leadership and there was more stability in government, big swings have been made to make room for digital assets. 

Shaking off Operation Choke Point 2.0 and the collective crypto casino rhetoric 

Turning to the US, Kraken’s number one jurisdiction, Halliday said the activity by the SEC differs from the activity he’s seeing in the UK and “would certainly welcome more of a similarity between the UK and the US.” 

Everyone that’s in crypto should want crypto to succeed, said Halliday. 

“When we have regulators that are actively looking to take action against crypto firms, especially the larger ones, you can’t feel like that is a positive thing for the industry. We always want the bad actors of the world to be handled decisively and swiftly, and no one wants those. But when the biggest players are being actively targeted or have ongoing engagement with the SEC, that will undermine people’s interest in crypto.” 

Halliday believes the UK’s regulation movements will give credence to the space and inspire more consumers to come over to crypto in the next six to 12 months – “not just the chosen elite who know the acronyms.” 

He says the legislation is a chance to demonstrate just how far the industry has come. “When I started in crypto in 2018, there really wasn’t anything. Now, five years later, we have the Anti-Money Laundering (AML) registration process, the financial promotions rule, and the Financial Services and Markets Act coming up. There’s never been a more secure time for people to come into crypto.”