The UK Government is finalising plans for a range of rules to regulate the cryptocurrency sector, the Financial Times newspaper has reported.
The measures are apparently set to include limits on foreign companies selling into the UK, provisions for dealing with collapsed businesses, and restrictions on the advertising of products.
According to the newspaper, ministers will shortly launch a consultation on the regulatory changes.
Making good on the Prime Minister’s earlier call for “effective regulation”
Prime Minister Rishi Sunak cultivated a reputation as a champion of crypto – and the associated regulation – long before he entered Number 10 in October.
Indeed, as recently as April – when he was still Chancellor of the Exchequer – Mr Sunak stated that “effective regulation” would help transform the UK into a global hub for cryptoasset technology, while encouraging “the businesses of tomorrow to invest, innovate and scale up on UK shores”.
While the UK’s Financial Conduct Authority (FCA) started earlier in 2022 to inspect UK-based crypto firms’ money laundering controls, the regulatory body doesn’t yet have the broader powers that would enable it to protect consumers in such areas as mis-selling, false advertising, fraud and mismanagement.
Presuming that the proposed new powers are introduced, “three people familiar with the Treasury’s thinking” were cited as saying this will afford the FCA a broader oversight of crypto, including keeping an eye on how companies operate and advertise their products.
The report further indicated that there would be restrictions on selling into the UK market from abroad, and that the proposals would outline how crypto companies could be wound down.
The powers will reportedly be contained in the Financial Services and Markets Bill, a comprehensive set of legislation presently continuing its passage through the House of Commons.
UK Government signals continued commitment to crypto
The Government has indicated that it remains determined to elevate the UK’s status in the worldwide crypto industry, minister Andrew Griffith having stated that “we’d be foolish to ignore the potential of the underlying technology”.
He said that the Financial Services and Markets Bill would implement a framework for regulating cryptoassets and stablecoins, and that the Government would be “consulting on a world-leading regime for the rest of the cryptoasset market later this year”.
Meanwhile, a Treasury spokesperson was quoted as saying to the Financial Times: “The UK is committed to creating a regulatory environment in which firms can innovate, while crucially maintaining financial stability and regulatory standards so that people and businesses can use new technologies both reliably and safely.
“The Government has already taken steps to bring certain cryptoasset activities into the scope of UK regulation – and will consult on proposals for a broader regulatory regime.”
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