A few months after United Kingdom Prime Minister Rushi Sunak assumed office, he said one of his priorities was to make the UK the world’s crypto hub. So, has he achieved that? Is it even legal for UK residents to engage in crypto trading? We have answers to these questions in this article. Keep reading.
Is it Legal to Purchase Cryptocurrencies in the UK?
Buying crypto assets like Bitcoin and Ethereum is totally legal in the United Kingdom. Moreover, the country has adopted a comprehensive regulatory framework to protect crypto traders. His Majesty’s Revenue and Customs categorize digital currencies as taxable assets. Therefore, they attract taxes.
That said, if you wish to buy Bitcoin and Ethereum while in the UK, you need to maintain accurate records for the purposes of tax reporting. An important aspect to note is that the UK government doesn’t recognize cryptocurrencies as legal tender.
The existence of a clear regulatory framework has promoted blockchain innovations and made crypto users in the UK aware of the risks associated with digital currencies. In October, the Financial Conduct Authority launched more rules aimed at protecting investors. The new regulations require crypto companies to provide accurate information while promoting their projects. Any firm found misleading investors would be charged hefty fees.
Practices for Keeping Your BTC and ETH Safe
Before we take you through the process of buying Ethereum and Bitcoin, it is important you understand the practices you need to employ to protect your crypto assets after buying them. Owning a non-custodial wallet is the first step in safeguarding your BTC and ETH tokens. That’s because such a wallet gives you complete control over your funds.
Non-custodial wallets come in two types: software and hardware. The former is designed to store your crypto assets in an online environment, while the latter maintains your digital currencies offline, keeping them away from cybercriminals.
After picking the right crypto wallet, ensure you keep your private keys safe. Avoid sharing them with people, as they might use them to gain access to your wallet and drain it dry.
A Step-by-Step Guide to Buying Bitcoin and Ethereum in the UK
Being two of the most popular assets, Bitcoin and Ethereum are available in several exchanges, both decentralized and centralized. As a beginner, however, we recommend you buy the coins via a centralized crypto exchange because the buying process is simple.
Follow these steps to purchase BTC and ETH in the UK:
Step 1: Select a Cryptocurrency Exchange
When selecting a crypto exchange, make sure it holds a license from the Financial Conduct Authority. It is not advisable to trade on an unregulated platform because you risk losing funds. Some of the exchanges permitted to operate in the United Kingdom include Crypto.com, Bitpanda, and Kraken.
Before registering with any exchange, check whether it supports the trading of Bitcoin and Ethereum. Also, examine the liquidity available in each platform and pick the one with the highest liquidity for seamless transactions.
Step 2: Select your Preferred Payment Method
After choosing an exchange and registering an account, the next step is picking a payment method to fund the account. Note that before you can explore payment methods, most exchanges in the United Kingdom will require you to complete the KYC (Know Your Customer) process.
Once done, you can decide to deposit funds using your debit card or make a bank transfer. Depending on the selected exchange, funds may take 1 to 3 days to reach your trading account if you opt for bank transfers.
Step 3: Place Buy Orders
After funds are successfully deposited, go to the spot market and choose Bitcoin and Ethereum trading pairs that match funds in your account. For example, if you deposited EUR, look for the BTC/EUR and ETH/EUR pairs. Next, place buy orders for the two assets.
Step 4: Transfer BTC and ETH to Non-Custodial Wallets
Once you buy Bitcoin and Ethereum, it is time to transfer them out of the exchange to non-custodial wallets. You can choose Atomic Wallet to store your Bitcoin and MetaMask for Ethereum.
Buying BTC and ETH in the UK is a straightforward process. However, the two crypto assets are highly volatile, meaning you can lose money anytime. So, invest carefully.
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