By Chris Dorrell
The government has set out plans to “robustly regulate” the crypto asset industry as it seeks to become a cryptocurrrency hub despite the problems faced by the industry last year.
The proposals include rules for crypto trading platforms and a “world-first” regime for crypto lending, as the government seeks to “embrace technological change”.
Proposals will make crypto trading venues responsible for defining admission requirements and publishing disclosure documents and ensuring crypto exchanges have “fair and robust standards”.
Rules around financial intermediaries and custodians – which have responsibility for facilitating transactions and safely storing customer assets – will also be strengthened.
“These steps will help to deliver a robust world-first regime strengthening rules around the lending of cryptoassets, whilst enhancing consumer protection and the operational resilience of firms,” the government said.
City minister, Andrew Griffith commented: “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology.
“But we must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards,” he continued.
Financial promotions in the cryptoasset business are also being brought under tighter control. Under the proposals, only cryptoasset businesses registered with the FCA for anti-money laundering purposes will be allowed to issue their own promotions.
An FCA spokesperson said: “We have been clear on the need for the financial promotions regime to be extended to cover cryptoassets. Cryptoasset businesses marketing to UK consumers, including firms based overseas, must start getting ready now for this regime. We expect to take a consistent approach to that taken for other high-risk investments.”
“Cryptoassets are high-risk and anyone who purchases them should be prepared to lose all their money,” the FCA said.
The government’s consultation will close on 30 April, after which the government will outline its consultation response.
Crypto regulation has rapidly climbed up the agenda after a series of high-profile collapses last year, culminating in the insolvency of FTX.
However, many regulators are wary of lending crypto more legitimacy than it deserves while still demanding strong consumer protection and anti-money laundering rules.
The post Crypto: Government is considering ‘world first’ regulatory regime in UK bid to become digital asset hub appeared first on CityAM.
