UK government to strengthen rules around crypto
The UK government is to set out plans to regulate cryptoasset activities as it looks to provide clarity for both consumers and businesses and leverage the opportunities presented by crypto.
Given the recent volatility and “structural vulnerability” within the cryptosphere, the government will strengthen rules for crypto trading platforms and crypto lending in line with traditional finance.
Economic secretary to the Treasury Andrew Griffith says that while the government is committed to growing the economy through leveraging new technologies such as crypto, “we must also protect consumers – ensuring robust, transparent and fair standards”.
The “ambitious plans” will ensure the UK benefits from this nascent industry while shoring up protections for consumers and firms against the potential “significant” risks, the government says.
Crypto trading platforms will be responsible for drawing up their admission and disclosure documents, ensuring “fair and robust standards”, while intermediaries and custodians will be subjected to strengthened rules around lending, consumer protections and operational resilience.
Industry concerns around crypto promotions will be addressed via a time limited exemption rule, while crypto firms registered with the Financial Conduct Authority (FCA) for anti-money laundering purposes will be allowed to issue their own promotions.
The consultation is set to close on 30 April 2023, after which the government will consider feedback and set out its response. Once legislation is in place, the FCA will consult on its detailed rules for the sector.
“Today’s announcement positions the UK as a safe jurisdiction for cryptoasset activity to take place, fostering innovation and providing firms clarity over the planned regulatory framework,” HM Treasury says.