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Author: Admin | 2025-04-28
Providers comply with the respective Anti-Money Laundering and Countering Terrorism Financing (AML/CFT) regulations and procedures.Additionally, the regulatory body keeps a record of crypto asset providers subject to UK money laundering regulations. As far as assets are concerned, security tokens fall under the regulation of the FCA. Other institutions in the UK that are involved in the regulation of the crypto market are HM Treasury and the Bank of England.More specifically, the AML/CFT requirements in place for crypto companies in the UK encompass The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Based on the nature and the type of assets on offer, companies must comply with The Financial Services and Markets Act 2000, and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, as well as the Electronic Money Regulations 2011 or the Payment Services Regulations 2017.To operate legally in the UK, crypto exchanges must register with the FCA, or apply for an e-money license. Additionally, Bitcoin ATMs on the territory of the UK must be licensed and regulated by the financial body.Generally, the UK government is working towards the establishment of a more regulated crypto industry and traders must stay tuned to new developments and regulations.Common Costs Associated with Crypto Trading in the UK?Before they engage in cryptocurrency trading, UK traders must be aware of the fees and commissions involved in the process. Depending on the crypto trading platform that UK traders and investors choose, a brokerage company, or a cryptocurrency exchange, different fees are in place. Keep in mind they may impact your trading profitability, so comparing several brokers or exchanges is advisable.Most crypto brokers organize their fee structure around spreads, or the difference between the bid and ask prices of cryptocurrencies. Highly sought-after cryptocurrencies such as Bitcoin may involve higher spreads compared to other less popular coins. Other fees that traders must check in advance include maintenance fees, overnight financing fees, payment processing fees, and inactivity fees. Most brokers do not charge deposit and withdrawal fees, however, this must be checked in advance, to avoid any unforeseen expenses.Exchanges, in contrast, profit from the so-called maker and taker fees. Based on when orders are executed, and consequently, if they add or take liquidity to the marketplace, there are maker and taker fees. Exchanges consider their customers’ trading activity over a particular period and based on it, they offer different fee tiers.Are Profits from Crypto Trading Taxed in the UK?As mentioned above, profits from cryptocurrency trading in the UK are subject to capital gains tax or income tax, depending on the circumstances. Whether you are an experienced crypto investor or a complete novice, it is advisable to be aware of the HMRC’s treatment of crypto assets.Profits from buying and selling crypto are most commonly subjected to capital gains tax (CGT). Losses ensuing from crypto trades could be used to offset the CGT bill. Swapping cryptocurrencies is also subjected to CGT. Traders pay CGT on their total gains above a tax-free allowance of £3,000 per year.
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