The British government has laid out a plan for a “rigorous” set of regulations for the crypto industry. The move is aimed at protecting investors and ensuring the stability of the financial system. Over the next three months, the UK will be rolling out new regulatory measures that will apply to both digital assets and traditional finance.
The UK Plans to Monitor the Crypto Market and Stay Committed to Innovation
The London administration has proposed a number of regulatory changes to the new industry and they will be in line with existing UK rules for the traditional financial sector. A public consultation process has been launched and it will run until April. In the Treasury’s released document, they underscore that “cryptographic technologies can have a profound effect on financial services.” The document outlines the work that will be done in the upcoming session.
The UK government believes that this is the best way to regulate the industry and help it “mitigate the most significant risks while taking advantage of crypto technologies.” They also hope that this will help the industry to grow, attract investment, and create jobs. Treasury Economic Secretary Andrew Griffiths said:
We remain steadfast in our commitment to driving the economy forward and embracing technological change, which includes crypto-asset technology. But we must also protect the consumers who are embracing this new technology.
The regulations are intended to set up “fair and robust standards” for crypto exchanges. They will also impose charges for defining detailed content requirements for admission and disclosure documents. This was announced last Wednesday.
Additionally, authorities indicated that they were looking to strengthen the rules for intermediaries and custodians that facilitate crypto transactions and keep customers’ digital assets. They believe that this could be a great way to set up a “world-first regime” for crypto lending.
The move comes after a string of high-profile failures, including the collapse and reorganization of the major crypto exchange FTX. Transfer is now possible. The British government has previously stated that they will adopt rules to prevent market abuse.
Most UK Crypto Asset Firms Fail Regulatory Approval
Last week’s announcement of the UK’s regulatory proposals has led to the Financial Conduct Authority (FCA) finding that the majority of entities interested in doing business with crypto assets in the UK have failed to convince regulators that they can meet the minimum anti-money laundering (AML) requirements. The regulator identified major flaws in areas such as transaction monitoring, risk assessment, and due diligence. “In many cases, key personnel lacked the appropriate knowledge, skills, and experience to carry out their assigned functions and control risks effectively,” said the FCA.
Meanwhile, the House of Commons Treasury Committee is continuing its investigation into the potential risks and alternative solutions of crypto assets and to determine whether regulation is necessary. “We are in the midst of an investigation into crypto regulation and these figures have not misled us into the impression that parts of this industry are a ‘Wild West,’” said Harriett Baldwin, chair of the select committee.
