Hero's Image

Hashdex responds to UK consultation on crypto assets


In February, the UK government requested feedback on its proposals for crypto asset regulation. Hashdex responded to the consultation with a focus on our experience as a global crypto investment manager. 

The proposal is a step-forward in recognising the crypto industry as the relevant market that it has become. This recognition helps crypto’s development and will improve public trust in the industry. Following is a summary of our key points made in response to the consultation. 


Hashdex recommends:


  • Advising and managing crypto assets should fall under the same regulations as traditional finance, as they pose the same risks.

  • Crypto assets should be available to retail investors on ETF, ETN or Funds wrappers,  and regulated by the FCA, like other financial products.

  • Portfolio management activities connected to crypto should be prioritized for regulation, as consumers already access such exposures through unregulated or loose means.

  • Traditional asset management firms should be allowed to invest in crypto and offer exposure to clients through regulated securities such as ETFs, ETNs, and mutual funds.

  • Regulation should remain technology neutral, and regulators should not adjudicate which technological developments offer markets the most benefit.

  • Staking activities should  have clearer regulatory requirements, bringing more security and clarity to investors, especially regarding the tax treatment.


The UK’s prioritisation approach is understandable given the broadness of the crypto universe, but it is key that the regulator tackles the most urgent issues first and keeps the regulation in a constant state of improvement and update. Our view is that the cryptoasset investment advice and portfolio management should be highly prioritized and addressed as soon as possible. 

Hashdex also understands that portfolio management activities connected to crypto should be regulated by the existing regulatory framework for traditional finance. While these activities provide exposure to crypto, this is done through traditional financial products such as ETFs, ETPs, and mutual funds. Therefore, it should be regulated as such, recognizing crypto assets as another asset class that investors can access through such regulated products’ structures.

We believe the government’s proactive approach in regulating crypto portfolio management activities should be prioritised in Phase 1 of the regulation. It is important to note that there is a massive scale of cryptocurrency adoption and awareness—recent studies show that 10% of British adults have personally bought crypto, while 20% know someone who has bought crypto assets. This is mostly being done through unregulated products and providers, such as crypto exchanges that are subject to little or no regulation. The approval of traditional products with exposure to crypto will not only help the development of the industry, but also provide a safer environment for investors, especially retail investors. This has proven to be true in other jurisdictions that have adopted this approach, like the EU with crypto ETPs, the US, as well as Canada and Brazil with their crypto ETFs.

Hashdex’s take is that investing in crypto through regulated products is no different from investing in any other asset class. Advisors are already required to understand complex and products and be able to explain it to their clients. 

Finally, when it comes to the mining and validation processes, Hashdex understands that the service providers, such as delegated validators, should be regulated as crypto-asset service providers (CASPs), and that there should be more clarity on the tax treatment of staking rewards.

For more on our perspective on crypto regulation, please see our recent article on the impact of the EU’s new MiCA regulation on investors and this article on our views on global crypto regulation. 




This material expresses Hashdex Asset Management Ltd. and its subsidiaries and affiliates (“Hashdex”)'s opinion for informational purposes only and does not consider the investment objectives, financial situation or individual needs of one or a particular group of investors. We recommend consulting specialized professionals for investment decisions. Investors are advised to carefully read the prospectus or regulations before investing their funds. The information and conclusions contained in this material may be changed at any time, without prior notice. Nothing contained herein constitutes an offer, solicitation or recommendation regarding any investment management product or service. This information is not directed at or intended for distribution to or use by any person or entity located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Hashdex to any registration or licensing requirements within such jurisdiction. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Hashdex. By receiving or reviewing this material, you agree that this material is confidential intellectual property of Hashdex and that you will not directly or indirectly copy, modify, recast, publish or redistribute this material and the information therein, in whole or in part, or otherwise make any commercial use of this material without Hashdex’s prior written consent. 

Investment in any investment vehicle and cryptoassets is highly speculative and is not intended as a complete investment program. It is designed only for sophisticated persons who can bear the economic risk of the loss of their entire investment and who have limited need for liquidity in their investment. There can be no assurance that the investment vehicles will achieve its investment objective or return any capital. No guarantee or representation is made that Hashdex’s investment strategy, including, without limitation, its business and investment objectives, diversification strategies or risk monitoring goals, will be successful, and investment results may vary substantially over time. Nothing herein is intended to imply that the Hashdex s investment methodology or that investing any of the protocols or tokens listed in the Information may be considered “conservative,” “safe,” “risk free,” or “risk averse.”

Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Hashdex, and Hashdex does not assume responsibility for the accuracy of such information. Hashdex does not provide tax, accounting or legal advice. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue”  “believe” (or the negatives thereof) or other variations thereof. Due to various risks and uncertainties, including those discussed above, actual events or results, the ultimate business or activities of Hashdex and its investment vehicles or the actual performance of Hashdex, its investment vehicles, or digital tokens may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward- looking statements in making their investment decisions. None of the information contained herein has been filed with the U.S. Securities and Exchange Commission or any other governmental or self-regulatory authority. No governmental authority has opined on the merits of Hashdex’s investment vehicles or the adequacy of the information contained herein.

Logo Hashdex
The material contained on this website is for informational purposes only and Hashdex, and its affiliates, is not soliciting any action based upon such material. The material is not to be construed as investment advice nor is it to be construed as recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Further, the material contained on this website does not constitute a representation that the financial instruments described therein are suitable or appropriate for any person. Past performance is not an indication of any future performance. This website may contain advertising of financial products.