Crypto Update: Royal Mint To Create NFT – Forbes

4 April: Chancellor Tells Royal Mint To Create NFT

Chancellor of the Exchequer Rishi Sunak MP has told the UK’s producer of notes and coins to create a non-fungible token (NFT) as part of a move to mark the UK’s forward-looking approach to the cryptocurrency industry.

NFTs are digital assets that represent real-world objects, such as unique works of art or mementoes of memorable sporting moments. NFTs, along with cryptocurrencies such as Bitcoin, use blockchain, a multi-point computer ledger designed to safely store digital data.

Speaking today at the Innovate Finance Global Summit, John Glen, economic secretary to the Treasury, announced that Mr Sunak has asked the Royal Mint to release an NFT this summer.

No details were given of what image or object the NFT might represent, nor whether NFTs would be used to generate funds for the exchequer.

Mr Glen said the announcement was one of a series of measures to make the UK a “global hub for cryptoasset technology and investment.”

Other measures announced by Mr Glen included:

• stablecoins, a cryptocurrency designed to have a relatively stable price by being pegged to a currency or commodity, to be regulated, paving the way for their use in the UK as a recognised form of payment
• legislation for a ‘financial market infrastructure sandbox’ by 2023, enabling firms to explore the “potentially transformative benefits of distributed ledger technology”
• a two-day ‘Crypto Sprint’ led by the City watchdog, the Financial Conduct Authority (FCA), in May seeking the financial services industry’s views on key issues relating to the development of a future cryptoasset regime
• establishing a Cryptoasset Engagement Group to work with the financial services industry
• looking at ways to improve the competitiveness of the UK’s tax system to encourage further development of the cryptoasset market.

Today’s announcement to launch an NFT at a time when the UK is in the grip of a cost-of-living crisis may raise eyebrows. Following his recent Spring Statement, Mr Sunak came under pressure from all sides of the political divide for not doing more to help the UK’s increasingly hard-pressed households.

News that May’s Crypto Sprint will be led by the FCA also has the potential to stoke tensions between the Treasury and the UK’s main financial regulator about future plans for the crypto industry.

The FCA issues regular warnings to consumers about the crypto industry, reminding them that cryptoassets are unregulated and high-risk.

The FCA’s current stance on crypto as an investment is that investors “are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them”.

30 March: Watchdog Extends Deadline For Selected Crypto Firms

The Financial Conduct Authority (FCA), the UK’s financial regulator, has extended a short-term licensing arrangement for several cryptocurrency firms, providing them with more time to get their affairs in order.

The FCA had previously announced that crypto companies operating without permanent licences by 1 April 2022 would be made to stop their UK operations. 

Crypto firms operating in the UK are required to register with the FCA under anti-money laundering regulations. So far, 33 firms have been added to the regulator’s list of registered cryptoasset organisations. 

But the regulator has now said that a dozen firms on its temporary register of cryptoasset businesses will be given additional time providing that they can show they need it.

The FCA’s Temporary Registration Regime for cryptoasset businesses was set up in December 2020. This allowed existing cryptoasset firms, whose applications had yet to be assessed by the regulator, to continue trading providing they had applied to register before 16 December of that year.

The FCA’s temporary register shows that two of the 12 firms now offered extensions include payments and banking app Revolut and Copper, a business that helps financial institutions trade cryptocurrencies.

Crypto firms on the temporary list will be given extra time if they supply more information for their application. According to the FCA: “This is necessary where a firm may be pursuing an appeal or may have particular winding-down circumstances”.

Earlier this year, a House of Commons Treasury Select Committee report criticised the FCA for the amount of time it had taken to deal with applications and recommended that the 1 April deadline should not be extended.

The regulator issues regular warnings to consumers about the crypto industry. It reminds would-be traders that cryptoassets are unregulated and high-risk, which means people are “very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them”.

The FCA’s Financial Services Register includes a list of unregistered cryptoasset businesses. According to the FCA, these “are UK businesses that appear to be carrying on cryptoasset activity that are not registered with the FCA for anti-money laundering purposes”.

Earlier this March, the FCA said it had opened more than 300 cases on unregistered crypto firms in the past six months “many of which could be scams”. 

22 March: Advertising watchdog warns 50 firms over crypto ads

The UK’s advertising regulator has issued an enforcement notice to more than 50 companies promoting cryptocurrencies, setting out its standards for ads and including warnings against encouraging investors to buy through fear of missing out.

The Advertising Standards Authority (ASA) says it issued the notice as part of an ongoing clampdown on “problem” cryptocurrency ads and to ensure that consumers are treated fairly in this area of the financial marketplace.

As part of the notice, ASA provides guidance on how the crypto industry should keep to the rules when promoting its products.

ASA says advertisers should state clearly that cryptocurrencies are unregulated in the UK and that the value of holdings can go down as well as up.

It adds that promotions must not imply that cryptocurrency decisions are trivial, simple, or suitable for anyone, nor must they imply a sense of urgency to buy or create a fear of missing out.

The guidance extends to ads in the press, on TV, via email, outdoor posters, in promoted social media posts and via paid agreements with influencers.

ASA will continue to monitor the situation and warns that it will take “targeted enforcement action to ensure a level playing field” if problem ads persisted after 2 May.

Earlier this year, the government said new rules on cryptocurrency advertising, overseen by City watchdog the Financial Conduct Authority (FCA), would be introduced bringing them into line with traditional financial promotions.

Guy Parker, the ASA’s chief executive, said: “Crypto has exploded in popularity in recent years. We’re concerned that people might be enticed by ads into investing money they can’t afford to lose, without understanding the risks. Working alongside the FCA, we’ll take strong action against any advertiser who fails to ensure that their ads are responsible.”

Sarah Pritchard, executive director of markets at the FCA, said: “People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA’s InvestSmart website. 

“Crypto assets remain unregulated and those who invest in them should be prepared to lose all their money.”

11 March: FCA Demands Closure Of Crypto ATMs

Watchdog the Financial Conduct Authority (FCA) has told cryptoasset firms to close any automatic teller machines (ATMs) offering crypto services in the UK.

ATMs offering cryptoasset exchange services in the UK must be registered with the FCA and must comply with UK Money Laundering Regulations (MLR).

The regulator says none of the cryptoasset firms registered with it have been approved to offer crypto ATM services. This means that any of them operating in the UK are doing so illegally and consumers should not be using them.

The FCA is contacting operators of crypto ATM machines in the UK to tell them that the machines be shut down or the operators will face further action.

The regulator issues regular warnings to consumers that cryptoassets are unregulated and high-risk, which means people “are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them.”

4 March: Man City Signs Crypto Deal With OKX

Premier League champions Manchester City have signed a multi-year deal with cryptocurrency exchange OKX.

The partnership, OKX’s first move into football sponsorship, will give the exchange an in-stadium presence at the club’s Ethiad stadium. The deal covers the men’s and women’s teams, as well as City’s e-sports operations.

Seychelles-based OKX claims to be the second largest cryptocurrency exchange with 20 million users worldwide. As part of the deal, it said it would be collaborating with City “to explore future innovation projects together”.

Sponsorship deals between football clubs and the cryptocurrency industry have become a regular occurrence in recent months.

The Bitget exchange recently announced tie-ups with both the Turkish side Galatasaray and the Italian club Juventus. See story from 17 February below. 

17 February: Galatasaray Deal Highlights Sport’s Growing Links To Crypto Sector

Turkish football team Galatasaray has partnered with a cryptocurrency exchange in a brand-building initiative aimed at introducing fans to the crypto sector.  

The sponsorship deal, brokered by Capital Sports Media Group, will feature the Bitget exchange as Galatasaray’s official partner on multiple platforms and media assets across both the club’s football and basketball teams.

The announcement is the latest commercial deal involving football and the cryptocurrency industry. It follows Bitget’s recent association with Italian side Juventus.

Earlier this month, Polish team Legia Warsaw revealed a tie-up with sport and entertainment agency Capital Block, to explore how to market Non-Fungible Tokens (NFTs) – a form of digital collectible – to its fan base.

Last October, Capital Block, the NFT division of Capital Media, advised Galatasaray on its first NFT release, featuring Ali Sami Yen, the club’s founder, which sold out in less than a minute. 

Sandra Lou, CEO of Bitget, said: “Turkey has demonstrated significant interest in the crypto sector and we look forward to growing our community in this market as we continue to lead educational and knowledge sharing opportunities within the space.”

Tim Mangnall, CEO of Capital Block, said: “We have been working with Galatasaray for a while now and we know how committed the club is to being aligned with the most modern and revolutionary technologies out there.”