UK Government takes steps to regulate cryptoassets: What does this mean for the sports industry?

2023 is set to be a big year for the future of cryptoassets in the UK. Currently largely unregulated, the Government has made clear that its intention in this space is to create a ‘dynamic regulatory landscape that works for everyone’.[1] No doubt influenced by recent high-profile failures in the crypto world, such as the collapse of FTX, and growing concerns regarding the risks posed to consumers by certain cryptoassets, significant regulation is making its way down the tracks. Notably, the Government has recently published legislation which proposes to regulate certain cryptoassets[2] as well as a consultation paper[3] which sets out a proposed approach to wider regulation of cryptoassets in the UK (the Consultation).  

Governments across the globe are currently attempting to strike a balance between, on the one hand, marketing themselves as crypto-hubs which embrace growth and innovation and, on the other, ensuring adequate regulatory protections for consumers. The UK’s goal of creating a Goldilocks economy for crypto is therefore ambitious, but understandable. With crypto firms seeking refuge from regulatory crackdowns in the US, such as the Securities and Exchange Commission’s recent investigation into Nasdaq-listed Coinbase,[4] it remains to be seen whether the UK can successfully wield its ‘second-mover advantage’ to successfully attract (and retain) crypto firms.[5]

In this article we provide:

• a brief recap of the existing UK regulatory landscape;
• an overview of the Government and Law Commission’s proposals in this space; and
• key takeaways.