Crypto Trading in the UK
The UK is among the top nations around the world in terms of cryptocurrency trading volume as per Atlantic Council reports. However, regulations for crypto services providers and investors continue to remain stringent to ensure consumer safety.
Therefore, the investors who are new to the country or have travelled to the region may have to learn about regulatory changes when it comes to investing in cryptocurrencies in the UK.
Buying Bitcoin and Ethereum in the UK
In order to purchase Bitcoin and Ethereum, the investors should research to find secure trading platforms and regulated exchanges. Trading cryptocurrencies in the country is a legal process but it can be somewhat challenging on account of strict rules.
Financial regulators in the country have mandated crypto trading platforms to inform their account holders regarding associated risks.
On this account, the investors should follow important guidelines such as picking a regulated and verified brokerage, creating secure wallet account, and remain alert regarding associated risks of digital currency transactions and swaps.
At the same time, the investors should conduct research to collect information regarding all regulatory requirements to trade digital assets. These regulations cover aspects of crypto trading such as secure storage, regulated exchanges, and licensed brokerage for secure market participation.
Regulatory Requirements to Purchase Bitcoin and Ethereum in the UK
Here are some regulatory requirements that investors from UK have to consider before investing in cryptocurrencies. It is important to note that His Majesty’s Revenue and Customs (HMRC) has added crypto trading as a taxable activity.
It means that when an investor deals in Bitcoin and Ethereum they have to comply with the payment requirements based on their crypto trading activities. At the same time, they investors have to keep detailed records tax obligations account for the P/L statement.
Furthermore, cryptocurrency investors should know that digital assets are not listed as legal tender like the British pound. This legal framework allows investors to preserve innovation and raise awareness regarding the associated risks of dealing in digital assets.
At the same time, it ensured that investors have access to legal environment for buying, selling, and storing Bitcoin and Ethereum. Financial Conduct Authority (FCA) ruled that digital currency trading services providers have specified marketing rules for the sector as well.
In September, the government introduced Travel Rule mandating that crypto-businesses have to collect, confirm, and share information regarding all its transfers.
Accessing Secure Crypto Storage Options in the UK
Bitcoin and Ethereum investors need to create a digital wallet account before purchasing any digital currencies. There are various options when it comes to cryptocurrency trading such as leaving the reserves on a regulated exchange or moving funds to a non-custodial wallet account.
It is better to leave small portion of investments on a cryptocurrency exchange while the investors should move the larger portion of their investments to a private wallet. It is important to note that storing funds on a crypto exchange means that investors do not have legal ownership over their crypto purchases and private keys.
Meanwhile, there are different types of Bitcoin wallets such as hardware, paper, and software options. On the other hand, Ethereum token investors can store their reserves on Ethereum-based wallets. Most wallet accounts on Ethereum are non-custodial and ensure full ownership of the added reserves.
Cryptocurrency investors use Bitcoin and Ethereum wallets to securely store their digital currencies and ensure that the private keys are stored in a secure manner. At the same time, investors can also transfer funds to cold-storage wallets.
Cryptocurrency Trading Platforms
Investors can go with a broker or crypto trading platform to invest in cryptocurrencies. In this manner, the investors are able to purchase digital currencies in United Kingdom.
However, the regulated trading platforms are obligated by the regulators to inform investors about associated risks such as hack incidents. While, crypto exchange does not fall under the purview of specified regulations but FCA mandates that crypto trading platforms under their jurisdictions.
Some of the licenses trading platforms in UK are Gemini, Bitpada, Gate.io, Coinbase, and Kraken. However, FCA mandates that digital currency trading platform inform the investors regarding the associated risks even for licensed firms. This step is added on account of the speculative nature and price volatility of cryptocurrencies.
Conclusion
Regulators in the UK have issued all aspects of digital currency trading such as payment options, ATMs, brokering services, placing orders, storing Bitcoin and Ethereum, crypto ETFs, and alternative virtual currency trading services providers.
