On 8 January 2025, the UK’s HM Treasury issued a statutory instrument amending the scope of “collective investment schemes” (the Amendment) under the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (the CIS Order). The Amendment removes “qualifying cryptoasset staking” from the scope of the CIS Order, and comes into force on 31 January 2025. A “qualifying cryptoasset” uses the same definition as contained in the UK’s financial promotions regime rather than imposing any “new” qualifications.
In the context of cryptoassets, staking typically refers to locking cryptoassets for the purposes of participating as a validator in a proof-of-stake consensus mechanism in return for certain rewards. The Amendment applies only to the use of qualifying cryptoassets in blockchain validation (which captures the validation of transactions on a blockchain or network using distributed ledger or similar technology), and carves out such arrangements from the existing definition of “collective investment schemes” — which would otherwise potentially impose UK authorisation requirements on the “operators” of those schemes.
This aligns the UK treatment of crypto staking activities with that of the majority of other jurisdictions, and means firms will no longer need to consider excluding UK participants from staking services on their platforms. This update reflects the new UK government administration’s commitment to advancing an increasingly pro-innovation approach to cryptoassets and financial technology more broadly.
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