United Kingdom treasury is finalising plans for a package of sweeping rules to regulate the cryptocurrency industry, including limits on foreign companies selling into the UK, provisions for how to deal with the collapse of companies and restrictions on the advertising of products, Financial Times reported on Tuesday.
Ministers will shortly launch a consultation on the new regulatory regime, after the implosion of FTX injected fresh urgency into the government’s promise to impose order on finance’s “wild west”, the report mentioned.
Prime minister Rishi Sunak said in April, while still chancellor, that “effective regulation” would help make Britain a global hub for cryptoasset technology and would encourage “the businesses of tomorrow to invest, innovate and scale up on UK shores”.
The Financial Conduct Authority this year began inspecting the money-laundering controls of UK-based crypto firms but it lacks broader powers to protect consumers in areas such as mis-selling, false advertising, fraud and mismanagement.
“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,” a Treasury spokesperson told the Financial Times.
“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.” The UK launched a consultation on crypto regulation in early 2021 that was mostly focused on stablecoins.
FCA chief executive Nikhil Rathi last week told the FT’s banking summit that his agency was already being “proactive” in areas where it does not yet have powers, including publicly warning on “the risks of investing in crypto, the potential to lose all your money”.
He added that 85 per cent of the firms that applied to join the regulator’s crypto register did not pass the FCA’s anti-money laundering tests.
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