Crypto businesses that issue non-fungible tokens (NFTs) in the U.K. may still need to register with the Financial Conduct Authority (FCA) even after the government introduces a new authorization regime for the industry.
This is according to a consultation on money laundering issued by the Treasury on Monday. The consultation suggests that NFTs, which are unique digital assets stored on the blockchain and can be used to represent ownership of assets like art, real estate, digital collectibles and more, may not be included in the new regime.
Currently, crypto financial service providers must be registered with the FCA to operate in the U.K. However, once the new regime is in place, this will no longer be necessary. The U.K. government is seeking responses on the proposed regime by June 9.
The consultation states that crypto firms that do not provide regulated financial services, such as NFT issuers, will still need to be registered and supervised by the FCA for anti-money laundering and counter-terrorist financing purposes.
This is because NFTs are not considered financial instruments under the Financial Services and Markets Act, which was passed last year.
In a consultation response from October, the government said that NFTs "were not appropriate for regulation as a financial service."