Which statement describes regulatory oversight of cryptocurrencies in the UK?

Which statement describes regulatory oversight of cryptocurrencies in the UK?

• A. Crypto is unregulated in the UK.
• B. Crypto exchanges must be registered with the FCA and are typically subject to AML regulation.
• C. Government prohibits crypto exchanges.
• D. Only banks regulate crypto in the UK.

Answer: (B)

In the UK, regulatory oversight of crypto activity is provided by the FCA. Crypto exchanges that operate as businesses must register with the FCA and fall under anti-money laundering rules. This arrangement is the best description because it captures how the regime actually works: firms dealing in cryptoassets must be registered and comply with AML requirements, including customer due diligence, ongoing monitoring, and reporting suspicious activity to the authorities, with ongoing supervision and consequences for non‑compliance. The regulation targets the service providers, not the crypto tokens themselves, which is why other statements—such as crypto being completely unregulated or government prohibiting exchanges—aren’t accurate. Banks aren’t the sole regulator either; the FCA and AML controls are central to the UK approach.

In the UK, regulatory oversight of crypto activity is provided by the FCA. Crypto exchanges that operate as businesses must register with the FCA and fall under anti-money laundering rules. This arrangement is the best description because it captures how the regime actually works: firms dealing in cryptoassets must be registered and comply with AML requirements, including customer due diligence, ongoing monitoring, and reporting suspicious activity to the authorities, with ongoing supervision and consequences for non‑compliance. The regulation targets the service providers, not the crypto tokens themselves, which is why other statements—such as crypto being completely unregulated or government prohibiting exchanges—aren’t accurate. Banks aren’t the sole regulator either; the FCA and AML controls are central to the UK approach.