Robert Hettinga wrote:

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The British government quietly announced yesterday that it will legislate to restrict crypto.

This could be a problem. The government is pretty burned out having run out of ideas a long time ago. Interferring with areas the people understand little of is a way to avoid making worse mistakes. Given that we have the worst Home Secretary this century there is little hope that civil liberties will play any part in any legislation. For those that don't follow UK politics the government has been methodically extinguishing civil rights such as the right to demonstrate in public and the right of a defendant to premptory challenge agains jurors (the prosecution retains the right). The key question is how urgently the govt intends to press the point. If they attach a provision to pre-election criminal justice bill then expect a really half baked clause. If they go for public comment gathering proceedures then the govt. is likely to be out of office before anything happens. With less than half the public support of the opposition Bob Dole stands more chance of election than the British Tories.

Does anyone here have any idea what this does to british-affiliated states like Anguilla, or the Caymans?

Nothing in the case of most dependent territories. Most territories are either entirely self governing or have some body which "assists" the govenor. Given that we have yet to unify English and Scottish law the process of making laws is quite complex. Presumably the govt intend to pass laws covering the whole of the UK, what mechanism they choose for this we will have to wait to find out. I would expect the Caymans to act to protect their tax-haven business. This could mean that they are pro crypto (increase effectiveness) or may mean that they go anti to avoid being seen as money laundering havens and invite Cuba style sanctions acts. Phill