While Bitcoin may be the most widely-used and best-known cryptoasset, there are several thousand different cryptoassets, each with their own unique characteristics, and their number and potential applications, distributed ledger technologies continues to increase.
The rapid growth of the crypto sector has drawn significant attention from policy-makers worldwide with governments taking divergent approaches to its regulation from the outright banning of financial institutions and payment processors from handling cryptoassets, to implementing regulatory frameworks to encourage the growth of the sector.
UK regulators, in particular, the Bank of England and the Financial Conduct Authority, contend that cryptoassets are not currency or money. HMRC, as the UK’s tax authority, has followed that stance. While proponents of cryptocurrencies will dispute this, it has far-reaching implications for the UK tax treatment of cryptoassets.