Since it’s creation in 2009 by anonymous cryptographer ‘Satoshi Nakamoto‘, Bitcoin has become dinner-time conversation and most people in the UK have that ‘one friend’ who made some money on it. That all sounds good and everything, but it gets people thinking; Is Bitcoin regulated in the UK?
No, Bitcoin is not currently regulated in the UK. This means that there are no official regulations surrounding the digital asset at this time, although it does not mean that it is illegal to transact. If any businesses wish to conduct Bitcoin-related activities, then they must receive approval from the FCA.
If you’re keen to learn more about Bitcoin’s regulation in the United Kingdom, then read on.
It doesn’t mean it’s illegal
The first thing that usually pops into people’s minds when they hear ‘not regulated‘ is ‘it’s illegal‘. That’s strictly not true, just because something isn’t regulated, it isn’t deemed illegal. The main reason there isn’t any regulation in the UK at the moment mainly falls down to a lack of time, the government need plenty of it in order to set up correct regulatory guidelines – in fact, they’re probably doing it as you’re reading this.
So, can I trade Bitcoin in the UK?
Yes. It is legal to trade Bitcoin in the UK, although if you are going to, there are a few considerations you need to take.
If you want to be protected, use a regulated crypto CFD broker, not an offshore exchange
Since Bitcoin isn’t regulated, you won’t be protected should you use an exchange which operates offshore in some shady country. If you are going to trade Bitcoin, I recommend that you use a CFD broker rather than an exchange, that way, should anything go wrong you are protected. Here are my personal favourites for UK Bitcoin trading:
eToro is hands down the UK’s most trusted place to trade Bitcoin. They are authorised by the FCA, so you know that you’re dealing with a legit firm.
Similarly to eToro, Plus500 is another FCA-regulated Bitcoin CFD provider. One of the things I like about this broker is that they offer a free £40K demo account, so you can give it a go before using real cash.
Dubbed the ‘UK’s #1 trading app’, Trading 212 provides a quality safe service when it comes to trading Bitcoin. You can use leverage on 212 to make the most out of Bitcoin’s moves.
The next major consideration largely overlooked by Bitcoin traders in the UK is filing taxes. Just because Bitcoin isn’t regulated, it doesn’t mean that you don’t have to pay tax on any earnings from it. Thankfully, HMRC released Cryptoasset tax guidelines for individuals – so make sure to read it before getting started with Bitcoin trading in the UK.
Remember – it’s volatile
Finally, you need to be aware of the volatile nature of Bitcoin. It’s pretty common for it to have major price swings in short periods of time, so you need to asses whether or not you can afford to lose any money trading it. My rule of thumb is; if in doubt, don’t.