Buying Bitcoin and Ether in the UK entails understanding the process. It’s legal, but there are complications, and the government stresses the importance of understanding the risks.
This guide explains buying BTC and ETH in the United Kingdom, including legal considerations, safe storage options, and recommended exchanges or brokers.
Legal Status Of Cryptocurrency In The UK
Purchasing Bitcoin (BTC) and Ether (ETH) in the United Kingdom is legal and governed by strict regulations. His Majesty’s Revenue and Customs (HMRC) has classified digital currencies as taxable products.
Obtaining Bitcoin or Ether in the UK requires reporting and paying taxes on these transactions. Therefore, keeping precise records is critical for those buying BTC and ETH here to comply with tax rules, whether profiting or losing in the crypto market.
The Financial Conduct Authority (FCA) expanded its oversight to cover crypto asset promotions in October 2023, highlighting the importance of accurate information and risk warnings. Furthermore, the Travel Rule requires UK-based crypto businesses to collect, verify, and share transfer information beginning in September 2023.
Adopting Secure Crypto Storage Solution
Before investing in BTC and ETH, you need a crypto wallet to keep your assets safe. There are various types of wallets available. Note that temporarily keeping your coins on an exchange is okay.
However, if you have large amounts of tokens, it is better to keep them using other storage options. Furthermore, you lose complete control when you leave your coins on an exchange.
You don’t have the keys to your coins, so you don’t completely own them. People use a variety of wallets to keep their Bitcoin safe, including hardware, software, and paper wallets.
There are specific wallets for Ethereum that can help you keep your ETH safe. These wallets allow you to manage your assets and conduct secure transactions.
How To Buy Bitcoin And Ether In The UK
Investors must choose a broker or a cryptocurrency exchange before purchasing crypto assets. Both allow you to buy digital currencies in the United Kingdom but differ significantly. With the risk of cryptocurrency hacks rising, choosing the proper exchange is difficult.
Select A Crypto Exchange
Digital assets and exchanges are not officially regulated in the United Kingdom, but the FCA requires service providers to register. Some exchanges, like Gemini, Bitpanda, Kraken, and Crypto.com, have already secured operational licenses.
It is worth noting that cryptocurrency investments are highly volatile, and there is no government support for them. Even if the FCA says an exchange is legitimate, being cautious is critical. For safety reasons, investors can spread their digital currencies across multiple exchanges.
Choose A Crypto Broker
Companies like Interactive Brokers and eToro make it easier for investors to buy cryptocurrency by providing simple websites that connect to exchanges. Some brokers charge higher fees, while others do not charge but make money by selling users’ data or making trades at lower-than-optimal prices.
These platforms are convenient, but you must keep your assets from their platform in a separate wallet.
The Right Payment Option
After you’ve decided on a crypto broker or exchange, you’ll need to open an account and deposit funds. You can use your bank account or a debit or credit card, but using cards may result in higher fees.
You will be asked to verify your identity when you create your account and choose how to pay. In the United Kingdom, this frequently entails providing them with proof of your identity and evidence of your address.
They may occasionally ask you questions about understanding the risks of cryptocurrency. After you deposit funds, it may take a few days before you can use them to purchase cryptocurrency.
Place An Order
After depositing funds into your account, you can purchase Bitcoin or Ether by specifying the amount in pounds. Exchanges handle this process differently; for example, some have a simple “Buy” button for BTC and ETH where you can enter the desired amount.
You do not have to purchase large amounts of Bitcoin or Ether; most exchanges allow you to purchase smaller amounts.
Alternative Ways To Purchase BTC And ETH In The UK
Some UK bank and digital payment apps, like PayPal, Revolut, MoonPay, and Skrill, allow customers to buy BTC and ETH directly through their platforms. However, these platforms do not allow users to purchase stock in a public company with the same account.
Meanwhile, JPMorgan’s UK bank partner, Chase, has decided not to allow its British customers to conduct crypto transactions beginning in October 2023.
In conclusion, buying BTC and ETH in the UK is straightforward once you follow the steps above.