The UK’s financial watchdog, the Financial Conduct Authority (FCA) has issued a public statement on distributed ledger technology.
The statement is a follow-up to an public invitation for views on the subject made in April of this year . The statement was chiefly concerned with the impact that blockchain technologies may have on other markets that the FCA regulates.
However, the statement also made reference to ICOs. It said that the FCA is currently conducting a “deeper examination” of the subject and is gathering further research with regard to the “fast-paced developments” of the blockchain world.
It will then decide whether further regulatory action is required. The FCA had already issued a consumer warning in September, saying that “ICOs are very high-risk, speculative investments.“
Regulator Chain Reaction
The statement points that any ICO which wants access to the FCA’s Innovate hub would need to be designed to satisfy the ‘consumer benefit‘ condition. The Innovative Hub is an FCA initiative to that provides technical infrastructure and regulatory advice for firms that are developing innovative technology.
The FCA statement adds the UK to a long list of countries whose regulators have made statements in the past few weeks.
Financial watchdogs in Israel, South Korea, the Philippines and other countries have all made recent statements on ICOs.
In the US, the SEC published its own statement at the beginning of the week, issuing a warning to ICOs falling under its jurisdiction that token sales will likely qualify as securities investments in most cases.
Most statements have amounted to cautious approval of the ICO phenomenon whilst hinting at further regulation to come. Authorities have been weighing up the trade-off between promoting innovation and avoiding embarrassing scams.
In its own statement, the FCA appears committed to keeping an open mind, stating that it is “open to all forms of deployment of DLT (including both permissioned and permissionless DLT networks) provided the operational risks are properly identified and mitigated.”