Yet another country is stepping up to regulate the cryptocurrency market. This is the United Kingdom, which is finalizing plans for a comprehensive package of rules to regulate the sector. According to the Financial Times, the new rules are expected to impose limits on foreign crypto companies selling to the UK. In addition, the guidelines will include provisions on dealing with business collapses and will address restrictions on product advertising.
UK wants to regulate sector ‘without stifling’ innovation
Also according to the report, the country’s ministers should soon launch a consultation on the new regulatory regime. After cryptocurrency exchange FTX imploded in November, many countries are racing to regulate the sector. But the UK has been working on this for a longer time. The country’s Financial Conduct Authority (FCA) this year began overseeing money laundering controls of UK-based crypto companies. In July of this year, the country’s authorities announced plans to create a “strong legal framework”. The idea is to support innovation and, at the same time, help the country to become a hub of digital assets. Back in April, Prime Minister Rishi Sunak had already said that “effective regulation” would help make Britain a global hub for crypto technology. Furthermore, it would encourage companies to invest, innovate and expand in the country. The UK was also one of the few countries to warn about FTX even before its collapse. In September of this year, as reported by CriptoFácil, the FCA informed the market that the exchange was not authorized to offer products and services in the United Kingdom. In light of this, the FCA said UK people “targeted by FTX” were unlikely to get their money back “if things went wrong”. And they did.
FCA Seeks More Powers to Regulate Crypto
Although it is already acting to contain any problems in the digital asset sector, the FCA still does not have broad powers to protect people in areas such as improper sale, false advertising, fraud and mismanagement. In this sense, the new regulation may give the agency powers to oversee the industry more comprehensively. Sources tell the Financial Times that the new rules are likely to impose restrictions on selling into the UK market from abroad. In addition, they must define how crypto companies could be closed down. Despite the crisis facing the digital asset market, Minister Andrew Griffith reinforced that the country continues to intend to be a hub for the sector. “Yes, there are questions about the future of cryptocurrencies. But we would be foolish to ignore the potential of the underlying technology,” he said. Still according to Griffith, the financial services bill will create a framework to regulate cryptoassets and stablecoins. “The UK is committed to creating a regulatory environment in which businesses can innovate, while maintaining financial stability and regulatory standards so that people and businesses can use new technologies more reliably and more securely. The government has already taken steps to bring certain cryptocurrency activities within the scope of UK regulation. It will now consult proposals for a broader regulatory regime,” a Treasury spokesman told the Financial Times.