Staking will not be considered a collective investment scheme in the UK, according to a recent amendment from the UK Treasury.
UK authorities have updated a section of the Financial Services and Markets Act 2000, which regulates financial markets in the UK, to clarify that crypto staking is not a “collective investment scheme”.
Staking is a process by which blockchain users lock up a network’s native tokens for a chance to participate in validating transactions on proof-of-stake blockchain networks like Ethereum. In return, participants earn rewards, usually in the form of additional tokens.
The Treasury amendment specifies that staking does not correspond to the definition of a collective investment undertaking. A mutual fund involves arrangements in which individuals pool their funds to share profits or income, such as exchange-traded funds or mutual funds.
These are regulated by the UK’s Financial Conduct Authority, requiring registration, authorization and ongoing compliance by approved managers to ensure investor protection.
The updated law explicitly states that “provisions relating to the staking of eligible crypto assets do not constitute a collective investment plan,” distinguishing staking from traditional investment models.
The amendment will come into force on January 31 and will apply to all four constituent countries of the United Kingdom.
Commenting on the development, Bill Hughes, attorney at Consensys, described it as a positive step, stating that “running a blockchain is not an investment plan” but rather a form of “cybersecurity.”
This clarification is part of wider efforts by UK authorities to regulate crypto assets and staking services in a way that encourages innovation while reducing legal uncertainty.
As previously reported by crypto.news, in November the Treasury announced plans to introduce crypto-specific legislation, focusing on stablecoins and staking exemptions in order to make the UK more attractive to investors. blockchain companies.
In October, a proposal to classify digital assets as personal property was presented to Parliament in response to a consultation paper published by the Law Commission, which recommended including digital assets in property law .
