Crypto investors sound alarm on UK’s capital gains tax hike and regulatory pressure

He expressed concern that the increased rates could lead some investors to consider relocating, noting, “I think the cold reality is, people who have the means to get out of the UK will be making plans. It’s not like tax is high but it is an incredible, beautiful, and safe place to live.”

These concerns are compounded by ongoing regulatory scrutiny from the Financial Conduct Authority (FCA), which has faced criticism for lengthy approval processes for crypto firms. Industry stakeholders warn that this combination of tax increases and regulatory pressure could erode the UK's status as a leader in digital finance. In recent years, the FCA’s extensive regulatory process has led to prolonged delays for crypto firms seeking approval, further complicating the environment for growth.

In addition to the CGT hike, Chancellor Reeves introduced a £25 billion increase in employers' National Insurance contributions, raising rates to 15% on salaries over £5,000, according to a report from The Times.

The Financial Times also reported criticism of Reeves for changing the government's fiscal rules from public sector net debt (PSND) to public sector net financial liabilities (PSNFL), a shift that allows more borrowing without breaching fiscal limits. Some analysts have questioned whether this approach will result in meaningful economic benefits.

As tax deadlines approach and regulatory demands remain stringent, the long-term impact of these policy changes on the UK's digital asset sector is yet to be determined.