The UK Treasury has updated finance laws to clarify that crypto staking, essential for proof-of-stake blockchains like Ethereum and Solana, does not qualify as a “collective investment scheme” (CIS), a category that is typically subject to heavy regulation.
In an order issued on January 8, the Treasury amended The Financial Services and Markets Act 2000 to specify that “arrangements for qualifying cryptoasset staking do not amount to a collective investment scheme (CIS).” The clarification defines “qualifying cryptoasset staking” as the process of validating transactions on a blockchain, distributed ledger technology (DLT) network, or similar systems.
A step forward for the crypto industry
This change is viewed positively by industry players. Bill Hughes, Consensys’ lawyer and Global Regulatory Matters Director, praised the decision on X (formerly Twitter) on January 9, stating, “This is a good development because the management and promotion of CIS are heavily regulated.” He emphasized that the nature of blockchain technology is not investment-based but rather a cybersecurity mechanism.
What is a collective investment scheme?
In the UK, collective investment schemes refer to any arrangements where participants receive profits or income derived from their involvement, including exchange-traded funds (ETFs) and investment funds. These schemes are tightly regulated by the Financial Conduct Authority (FCA), which mandates registration, authorization, and continuous compliance for approved managers.
By clarifying that staking does not fall under CIS, the UK Treasury removes the potential for staking services to be subjected to these stringent regulations, offering clarity to the crypto industry.
Staking explained
Crypto staking allows blockchain users, such as those on Ethereum and Solana, to lock up their native tokens to validate transactions on the network. In return, participants are incentivized with additional tokens. This process is essential for maintaining the integrity and security of proof-of-stake blockchains.
Treasury’s commitment to crypto regulation
This move aligns with the UK Treasury’s broader plan, outlined in November 2024, to draft a comprehensive cryptocurrency regulatory framework by early 2025. The new framework will address key areas such as staking services, stablecoins, and broader crypto market oversight.
Tulip Siddiq, the Economic Secretary to the Treasury, expressed her stance at a conference in London in November 2024, saying, “For me, it doesn’t make sense for staking services to have this treatment.” She confirmed the government’s intention to eliminate legal uncertainty around crypto staking.
Conclusion
The clarification of crypto staking’s legal status in the UK is a significant development for the crypto industry, which had lobbied for this change to avoid the complexities of CIS regulations. As the UK continues to refine its regulatory approach, the move signals greater regulatory clarity for blockchain technologies and their participants.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
As an author at Coinography, I create insights that translate fast-moving Web3 developments into clear, useful narratives. I explore topics such as decentralized governance, digital identity, creator economies, token models, protocol design, and the shifting cultural patterns around emerging technology. My aim is to make digital transformation more understandable and approachable for a wider audience.
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