Writing in The Times, Director and Head of Blockchain and Digital Assets, Matt Green, argues that the UK government needs to adopt a clear big picture strategy on implementing blockchain technology if it is to maintain parity with competitors.
Matt’s article follows a recent letter he co-signed as chair of techUK’s Blockchain and Digital Assets working group, alongside a coalition of leading UK and global trade bodies in the crypto sector to the UK government urging them to advance its digital asset and blockchain policy.
Matt’s article was published in The Times, 24 April 2025, and can be found here.
Government must urgently delivery regulatory clarity for cryptoassets
It is roughly six months since the digital assets industry called on the Labour government to provide urgent “regulatory clarity” at the party’s annual conference. The then economic secretary to the Treasury, Tulip Siddiq, responded by confirming the government’s commitment to fostering innovation in financial services, but there is little meat on the bone.
It has also been three years since the previous government’s plan to make the UK a global cryptoasset technology hub. This ambiguity serves no one.
Helpfully, the Financial Conduct Authority (FCA) has since published key dates in a ‘crypto roadmap’ that details the development of comprehensive regulatory framework for the UK. Draft legal provisions are expected soon, with a series of consultation papers examining how the future regime will work and its content – such as stronger regulation for capital, liquidity and risk management of cryptoassets – to come. The roadmap anticipates that the rules will take effect late next year.
While that is welcome, the UK needs clarity and momentum to boost investment, growth and jobs, and to avoid falling behind competitors such as Singapore, the UAE or the US in technology investment and innovation. If the government is serious about making crypto a strategic priority, it should mirror the US by appointing a crypto special envoy – President Trump has appointed David Sacks, the former senior executive at PayPal, to that role.
The UK desperately needs a comparable appointee who can drive policy alignment, assimilate industry innovation and ensure that regulation and legislation are formulated and drafted with the UK’s best interests.
Our government also needs a plan that will focus on identifying opportunities and attracting investment. These could include an incentivisation programme to attract businesses with significant potential, explore elements of public sector integration and create a competitive tax and investment landscape.
Recognising the symbiosis of blockchain, artificial intelligence and quantum computing and their potential value is vital, both for preparing future regulatory frameworks, and considering use in daily life. Ultimately, this will improve efficiency for a swathe of crucial public services. Consider how the Land Registry and Companies House could hold important documents on the blockchain to simplify and accelerate property and share transfers. Key government procurement contracts and transmission of NHS data could also be transformed.
According to the FCA, 12 per cent of UK adults – about 7 million people – owned cryptoassets last year. In contrast, according to the most recent data, only 8 per cent of global venture capital funding went into UK firms that specialise in that field, while the US dominates with 76%.
A clear direction, guided by a singular politically and sector agnostic driver, and with clear regulatory framework, could transform the UK economy for decades to come.
Director and Head of Blockchain and Digital Assets, Matt Green, recently co-signed a letter to the UK government alongside a coalition of leading UK and global trade bodies in the crypto digital assets sector, on behalf of techUK.
Addressed to Varun Chandra, the Prime Minister’s Special Adviser on Business & Investment, the letter cites recent geo-political events as key reasons as to why the UK should continue to advance its digital asset and blockchain policy to ensure that it becomes a premier jurisdiction for crypto investment and innovation.
Matt and his fellow signatories put forward a number of practical recommendations to the government, including the following:
Appointing a ‘blockchain’ special envoy to drive policy alignment and innovation
Developing a Government Action Plan for digital assets and blockchain technology
Recognising the synergy between blockchain, quantum computing, and AI
Establishing a high-level forum for industry-government-regulator engagement
Director Dominic Holden comments on the news that Apple is set to withdraw its Advanced Data Protection feature from the UK, following a dispute with the Home Office over end-to-end encryption and enabling government access to user data.
Dominic’s comments were published in TechRound, 26 February 2025, and can be found here.
Dominic’s comments are replicated below:
“Balancing privacy rights with the needs of national security is a tightrope that tech companies walk daily. In this case, it appears Apple have begun to teeter.
“End-to-end encryption allows users to more effectively secure their data and better protect it from hackers and other bad actors. However, it can also allow criminals to plot and conduct illicit activity.
“Aside from whether the public trust that a back door such as this will not be misused by the government, the danger of a back door is that it also creates a vulnerability which a hacker may be able to exploit.
“Apple’s decision to withdraw UK user’s ability to encrypt data removes an effective weapon to protect against hacking, whilst hackers and other bad actors will likely migrate to alternative encrypted services that the government cannot access.”
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In a recent article published by Thomson Reuters, Matt Green, Head of Blockchain and Digital Assets, explores the topic of recovering lost Bitcoin. Alongside his co-authors, Brian Mondoh, Barrister at Titan Chambers, and Marcin Zarakowski CEO of Token Recovery, Matt addresses the common belief that Bitcoin is a decentralized network and explains how recent developments have made it possible to recover lost Bitcoin assets.
The article highlights two primary scenarios for losing Bitcoin: theft or scam, and losing access to private keys or seed phrases. They delve into the Digital Asset Recovery (DAR) process on the BSV blockchain, which allows for the reassignment of lost or stolen digital coins through valid court orders.
By ensuring compliance with court orders, the BSV network can freeze and reassign assets to their rightful owners, making the recovery process more efficient and cost-effective.
Head of Blockchain and Digital Assets, Matt Green, recently submitted evidence to the House of Lords Special Public Bill Committee on the Property (Digital Assets etc) Bill.
Matt argued that the Bill is both necessary and effective. He suggests that legislation, as opposed to common law, would provide the judiciary and policy makers with the confidence to apply property right principles to a new asset class – which is vital for consumers and financial institutions who are increasingly reliant on digital assets. Matt further argues that the Bill prescribes a negative definition which allows for things not yet created or not easily defined as capable of inclusion – providing additional flexibility to policymakers.
He notes that the Bill is a response to nervousness in the judiciary in deviating with established definitions of property, and that the wording is the door ajar to give decision makers the freedom to create new asset classes where required, without falling foul of common law principles.
Discussing the Bill’s potential for negative or unexpected consequences, Matt warns that the wide wording of the Bill may open the floodgates and policy must therefore be carefully considered and robustly drafted. He also notes that monitoring the benefits and drawbacks of the Bill must be considered on an ad hoc basis by policy makers, to prevent any unexpected consequences.
In all, he senses that although there are more pressing matters at law, including (i) liability of decentralised entities, and liability of coders/ software developers (ii) regulation of digital assets, and the rules of engagement and (iii) the effectiveness of the Economic Crime and Corporate Transparency Act (2023), the Bill, of a version of it, must be passed to give confidence to the market and to show this jurisdiction is taking digital assets seriously.
In relation to improving the Bill, Matt argues as to why the chosen thing should be an object of personal property rights – suggesting it may be considered as heavy handed. He also notes that it may be useful to include some non-determinative wording as part of this legislation to help guide decision makers when considering property rights.
Matt Green, Director and Head of Blockchain and Digital Assets at Lawrence Stephens has contributed to the launch of a new guide, The Founders’ Guide to UK Crypto Law by Lisa McClory, Digital Technologies Lead at D2 Legal Technology, an award-winning legal data consulting firm.
Matt’s co-author is Marcin Zarakowski, CEO of Token Recovery. In their chapter on ‘Tracing, Freezing and Recovery – when crypto assets are stolen‘, they explain the risks, and the legal procedures available to those affected.
The publication came about through the recognition of the urgent need for some solid and practical guidance for projects looking to start out in the Web3 space (the concept emphasising personal data ownership and the use of blockchain technology and cryptocurrencies).
The guide brings together many of the top experts in the area to deliver on this objective. It is intended as a starting point for Web3 builders and entrepreneurs in the UK. The guide acknowledges the important role that law and regulation play and seeks to assist projects in overcoming uncertainty, avoid pitfalls and generally equip the reader with the essential knowledge to empower and catalyse their ideas.
Despite cyptocurrencies becoming more mainstream, recent commentary suggests that investors are still finding it hard to utilise these to purchase property in the UK. A recent Financial Times article highlighted the low appetite for sellers to accept cryptocurrencies. As a result, if purchasers want to use their crypto investments towards a property purchase, this usually involves converting the cryptocurrency into traditional or fiat currency – legal tender established by government regulation.
Much of the reluctance to accept funds derived from the disposal of cryptocurrency comes from its well-publicised association with criminal activity, in particular money laundering. Law firms have obligations imposed by the SRA in relation to checking sources of wealth and sources of funds for anti-money laundering (AML) purposes. Solicitors have a legal duty to ensure that any, and all, funds used within a property transaction have come from a legitimate source. They must therefore establish the original source of the funds, not the mere availability of funds in a bank account.
Establishing the legitimacy of funds generated through cryptoasset activity requires the instruction of an expert who is able to carry out a full report on the crypto proceeds being used. The content of this report includes documenting and reporting of the cryptoasset activity, including the initial ‘on-ramp’ into crypto (i.e. the exchange of traditional fiat money into cryptoassets), the purchase of cryptoassets, and the subsequent cryptoasset activity to the ultimate liquidation and ‘off-ramp’ from cryptoassets back into traditional fiat money which was then being used to make the purchase. This report can then form the basis on which the conveyancer can make a judgment as to whether it is safe to proceed with the proposed transaction.
There are currently few law firms with the required expertise to produce such reports. Buyers wishing to use crypto assets for property purchases should be especially aware of the need to establish legal source of funds when buying property at auction.
The Lawrence Stephens’ team was recently called in at short notice to assist a client who had purchased a property for £210,000 at auction. He had intended to fund the purchase by utilising proceeds mainly generated through investing and trading on cryptoassets. Our client had instructed solicitors in relation to the purchase. However, just two days before the notice to complete was due to expire, the client was informed that they did not have the necessary expertise and could not provide the required report on the source of funds coming by way of crypto. At this late stage, he was at risk of losing his 10% deposit.
The Lawrence Stephens’ team – comprised of Asim Arshad and Gunduz Misiri – were able to take on the instructions and were able to extend the notice to complete by three days. This gave the team enough time to complete a full crypto source of funds report to verify the funds coming by way of crypto and intended to be utilised for the purchase. We were pleased to effect the completion of the purchase within the agreed upon extended time.
Matt Green, Head of Blockchain and Digital Assets will be giving evidence to the House of Lords in the Property (Digital Assets etc) Bill this Thursday.
The bill is designed to ensure new asset classes aren’t prevented from being the subject of property rights if they do not fall neatly into the relevant two categories under common law.
As the Chair of techUK’s Digital Asset Working Group, Matt will be giving expert evidence on the impact of this legislation.
You can view the livestream of Matt’s appearance from 11.30am on Thursday 5 December by clicking here.
Posted on: November 18th, 2024 by Hugh Dineen-Lees
Director and Head of Blockchain and Digital Assets Matt Green comments on the introduction of the Property (Digital Assets etc) Bill, and argues that this legislation will provide greater clarity to the treatment of cryptocurrencies and digital assets under UK law.
Matt’s comments were published in eprivateclient, 15 November 2024, and can be found here.
“Property rights allow individuals to identify and demarcate ownership. In turn, being deprived of property creates a right in either damages or for that exact property to be owed. This ensures there’s greater market confidence when dealing with property, as there are clearer legal rights to ownership, control and general treatment of that property.”
“Historically property fell into two main categories – things that are tangible and exist physically or a contractual right enforced by a legal system (such as a debt claim or contractual right to goods). Digital assets (including cryptocurrencies, digital files and records, email accounts and certain in-game digital assets, domain names, even verified carbon credits) do not fall neatly into either category.”
“Use of a negative definition as proposed in the Digital Assets Bill, future proofs how property is treated, preventing the need to return to the issue for decades to come. To give an exhaustive list of what property is limits what may or may not exist going forward, so the wording is designed to ensure policymakers and the public at large are given that freedom to treat “things” as property when required, as well as the ability to sensibly divert from the rigid definition of property when required.”
“Although a welcome change for a legal system previously often unequipped to deal with such matters, enabling a “thing” to be property even where it is not tangible or creates a legal right may create inconsistencies at common law given the broad strokes definition. However the benefit of future proofing far outweighs the potential for inconsistencies and the Law Commission included guidelines as to what may constitute property under this Bill to assist decision makers.”
“As more “things” become property at a legal level, we may see the implementation of further laws, or even Judge’s decisions, which sweep up any unanswered issues. Overall, this Bill is a huge win for those dealing in digital assets, providing much needed clarity in an economy already utilising this technology at large.”
Welcome to the In Early podcast, where host Matt Green dives into the world of digital assets and technology. In this episode, Matt speaks to both Marcin Zarakowski and Roman Bieda, of Token Recovery, a Swiss outfit specialising in “combining technical expertise, legal proficiency and a swift, discreet, end-to-end process devised to get your property back”.
Matt also asks them about their backgrounds at BSV and Coinfirm respectively, and more about the operation, how Token Recovery take on victims of fraud where crypto assets are lost following a hack or scam, and how they work with lawyers, like me, law enforcement, and blockchain analytic services like Global Ledger to navigate the recovery process.
Key takeaways from Marcin Zarakowski and Roman Bieda
– Their backgrounds, including at Coinfirm, and EU Blockchain Observatory and Forum how Token Recovery was formed and its mission, with Roman referring work involving ChipMixer;
– How Token Recovery take on victims of fraud where crypto assets are lost following a hack or scam, and how they work with lawyers, law enforcement, and blockchain analytic services like Global Ledger to navigate the recovery process;
– Each of their processes “Consult and Review”, “Trace and Evaluate”, “Plan and Authenticate” and “Enforce and Reclaim”;
– Issues with the recovery process and how they are overcome;
– The role of transaction monitoring at crypto-exchanges and whether that’s a good tool for preventing crime.
Matt asks them about their backgrounds at BSV and Coinfirm respectively, and more about the operation, how Token Recovery take on victims of fraud where crypto assets are lost following a hack or scam, and how they work with lawyers, like me, law enforcement, and blockchain analytic services like Global Ledger to navigate the recovery process.
Senior Associate Asim Arshad examines the FCA’s first criminal prosecution over the unlawful operation of crypto ATMs, and discusses the wider implication of this crackdown for both lawyers and crypto businesses in the UK.
Asim’s article was published in Law360, 11 October 2024, and can be found here.
On Sept. 10, the U.K.’s Financial Conduct Authority launched a criminal prosecution against Olumide Osunkoya, the first of an owner of a firm enabling crypto asset trading, who pled guilty to the charges. The regulator announced that it had secured its first conviction on Sept. 30 for two offenses relating to the unlawful operation of multiple crypto automated teller machines that were not registered with the FCA.[1]
This article will examine the wider implications for lawyers of that decision.
The FCA alleges that, between December 2021 and September 2023, machines operated by Osunkoya across multiple locations processed crypto transactions with a combined value of £2.6 million ($3.4 million).
It is clear that the regulator is starting to clamp down on crypto activities associated with money laundering.
The FCA confirmed that this is its first criminal prosecution relating to unregistered crypto asset activity under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Over the past two years, the regulator has inspected dozens of locations suspected of hosting crypto ATMs, and last month stated that there are no legal crypto ATM operators in the U.K. Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, said: “If you’re using a crypto ATM, you are handing your money directly to criminals.”[2]
Overly Aggressive
The FCA’s position is clear: Crypto ATMs are inherently problematic. As a result, legitimate operators who value regulatory compliance are being actively deterred from considering the U.K. as a potential jurisdiction in which to locate them.
The prosecution of Osunkoya demonstrates the FCA’s commitment to taking enforcement action against unregistered crypto asset businesses. It is an unambiguous signal to those operating within the sector that the regulator will actively pursue transgressors via criminal charges, civil proceedings, or both.
This is not unprecedented. Through previous enforcement action, the FCA has shown itself willing to act, not least because firms operating in this sector are perceived to be a greater risk in terms of money laundering and potential misuse by bad actors.
In its inaugural crypto-related enforcement action in July, the FCA imposed a £3.5 million fine on CB Payments Ltd., part of the Coinbase Group, for breaching requirements imposed under the Electronic Money Regulations 2011.[3]
Crypto ATMs
In their simplest form, crypto ATMs enable users to deposit cash that is converted into crypto-assets. The machine records the deposit, either generating a wallet for the user or requesting the user’s public wallet address to which the crypto can be sent. Operators typically earn fees from these transactions.
Crypto ATMs are often fitted with a camera that records the user making the deposit; some also require the user’s ID documents to be scanned, allowing their details to be recorded.
This functionality enables easy, almost immediate conversion of cash to crypto. Some ATMs offer bidirectional functionality, enabling both the purchase of crypto and the sale of crypto for cash. Some ATMs require little or no personal information, providing the user with the additional benefit of privacy, or even complete anonymity.
Although crypto ATMs are not inherently illegal, to operate one requires registration with the FCA. As noted, currently, there are no registered crypto ATM operators in the U.K.
It is important to note that the same requirements do not apply to crypto purchases made via more traditional methods, such as a centralized exchange.
Illicit Use of Crypto ATMs
The privacy afforded by crypto is attractive to criminals, particularly those who seek to launder illicit money and obfuscate any audit trail. Globally, authorities in multiple jurisdictions have moved to shut the machines down because they provide an ideal conduit for laundering money, with limited traceability on where funds originate and where they are sent.
Although this regulatory approach is becoming more common, it should not be automatically assumed that everyone who uses a crypto ATM is party to a criminal transaction.
Impediment to Thriving U.K. Crypto Industry
It can be argued that the FCA should narrow its focus toward enhanced monitoring and regulatory compliance. It may also be said that its objective should be to ensure that crypto ATMs and, therefore, those operating and profiting from them, require customer identification and appropriate know-your-customer steps before customers can transact.
Another means of regulating the marketplace would be to create a customized set of KYC rules for crypto ATMs that would potentially mitigate their use for criminal activity.
Technology might play a part in making this work. For example, fingerprint or facial recognition technology could be used to validate an individual’s identity and enhance KYC checks. This could be undertaken in conjunction with the scanning of a passport, where a live camera scans an individual’s face and matches it to the passport photo, while background checks are simultaneously undertaken on the passport itself.
Regulatory authorities in some other jurisdictions take a different view. Crypto ATMs can be found in multiple countries, with more than 1,000 located in various European Union member states, for example.
Worldwide, users seeking to access crypto and bypass the traditional banking system can access more than 37,500 crypto ATMs, according to data provider AltIndex.[4]
Therefore, those who do wish to use them have perfectly legal options in diverse global locations.
The FCA’s excessively antagonistic language may deter crypto users who do value regulatory compliance from considering the U.K. as a potential jurisdiction to be located. Manifestly, choosing the U.K. in the current climate would be an unlikely option for any crypto ATM operator.
As current regulations stand, crypto companies wanting to operate in the U.K. must first register with the FCA, which assesses them under anti-money laundering and other regulations.
In its latest annual report published in September, [5] the FCA noted that it had rejected 87% of the applications received from crypto-asset companies seeking clearance for their money laundering defenses.
The regulator also issued 450 consumer alerts against crypto-asset promoters — only three months after rules against misleading marketing were tightened.
The charges brought against Osunkoya highlight the importance of compliance in the crypto sector, serving as a stark reminder for crypto asset businesses about the risks of noncompliance.
Conclusion
Given that the FCA is monitoring the crypto ATM sector through active policing, enforcement and prosecution, organizations in the U.K. need to take a similarly proactive approach to KYC and related protocols through constant monitoring and adaption. This means complying with the spirit of what the FCA wants, rather than just the bare minimum.
Posted on: September 16th, 2024 by Hugh Dineen-Lees
With Revolut looking to establish itself as the next fintech ‘superapp’, Head of Blockchain and Digital Assets, Matt Green, comments on how financial institutions must tread carefully when implementing new technologies.
Matt’s comments were published in Financial News, 10 September 2024.
“Established, traditional financial institutions have the reputation and pockets to carefully implement new fintech, and will have the necessary airbags to deal with risks.
“Fintech companies are usually at the coalface, solution-finding and locating, and then mitigating risk as best they can. Revolut would need to tread carefully to balance the weights and take the best parts of what they have.”
