Global Glosssary: Includes FCA Definitions & Handbook references

A securities settlement mechanism that links a securities transfer and a funds transfer in such a way as to ensure that delivery occurs if and only if the corresponding payment occurs.

A type of technology that enables the sharing and updating of records in a distributed way.

Electronic money is stored monetary (including magnetically) value as represented by a claim on the electronic money issuer which is issued on receipt of funds for the purpose of making payment transactions and is accepted as a means of payment by third parties other than the issuer.

A government-issued currency that is not backed by a physical commodity, such as gold or silver.

Financial Promotion Requirement Exemption Regulations the Financial Services and Markets Act 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023 (SI 2023/966).

Scammer develops a fraudulent website or application and convinces victims to deposit funds to the platform under the guise of providing victims access to a unique investment opportunity. The fraudulent platforms appear legitimate, even going as far as replicating price movements and producing artificial gains.

A functionality that disables the transfer of a stablecoin, so that they can no longer be used for economic activity.

The state of being interchangeable with and indistinguishable from another

Exploiting a computer system or private network inside a computer with the intent of stealing personal information, such as passwords and bank account information, for financial gain.

Ponzi schemes promise passive income and high returns in short periods through an investment of crypto assets. These schemes often offer payment structures similar to that of multi-level marketing or pyramid schemes to recruit new investors, promising early investors a percentage of the profits of other investors they recruit. These schemes are usually heavily promoted through social media and may use paid social media promoters to market their product. Initially, the investment platform will appear legitimate and produce positive returns consistently. However, the scammer will eventually take off with the invested funds and freeze the platform under the guise of technical issues, before completely shutting down the platform.

This means that information or transaction history held on the blockchain cannot be modified or altered once created.

Scammer impersonates a legitimate business, government agent, or well-known figure to gain access to a user’s systems and personal information for financial gain (e.g. to steal the user’s assets).

Investment trust a company which:

(a) …

(b) (for the purposes of COBS 4.12B and the definitions of nonmainstream pooled investment and packaged product only) is resident in an EEA State and would qualify for such approval if resident in the United Kingdom.

Liquidity mining is an investment strategy used to earn passive income with crypto assets. Investors stake their crypto assets in a liquidity pool to provide traders with the liquidity to conduct transactions. In exchange, investors receive a portion of the trading fees.

In the liquidity mining scam, victims move cryptocurrency from their wallets to the liquidity mining platform and see the purported returns on a falsified dashboard^[1]. Believing their investments to be a success, victims purchase additional cryptocurrency. Scammers ultimately move all stored cryptocurrency and investments made to a scammer-controlled wallet.

A smart contract arrangement in DeFi that holds two or more cryptoassets to enable financial activity to take place, such as trading or lending

Scammer broadcasts a livestream event through an online streaming platform (e.g., YouTube) to market a fraudulent promotion or product. Promotions typically offer questionable terms that are too good to be true and may request payment through crypto assets.

Local authority security any of the following:

(a) a non-readily realisable security or non-mass market investment (other than a unit in an unregulated collective investment scheme) issued, or to be issued, by a local authority;

(b) a P2P agreement entered, or to be entered, into by a local authority as borrower;

(c) a P2P portfolio consisting exclusively of agreements entered, or to be entered, into by one or more local authorities as borrower.

Acquiring of payment transactions is defined in regulation 2 of the PSRs as “a payment service provided with a payment service provider contracting with a payee to accept and process payment transactions which result in a transfer of funds to the payee.” This includes traditional ‘merchant acquiring’ services enabling suppliers of goods, services, accommodation or facilities to be paid for purchases arising from card scheme transactions.

Creating new digital coins or tokens on a blockchain network.

MMFs are a type of open-ended investment fund used in many jurisdictions, that gives investors a way to diversify credit risk and a place to hold rather than grow their assets.

Multi-party computation is a cryptographic method used to increase the security of asset storage and transactions on the blockchain. It works by securely distributing the private data required to validate transactions in such a way that the data held by one user is kept secret to the other users taking part in the protocol.

A system which aggregates and offsets multiple payments between banks.

A computational device operated by blockchain network participants to store a copy of all transactional data, check the validity of new blocks and broadcast information to other nodes in the network.

Non-mass market investment either of the following:

(a) a non-mainstream pooled investment;

(b) a speculative illiquid security.