UK’s Crypto Industry Under Tighter Scrutiny After New Regulation Plan

Posted on December 6, 2022
News
By Mark Otto
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The UK government is reportedly working on a framework aimed at regulating the cryptocurrency industry. The UK Treasury, which will be in charge of scrutinizing the sale and marketing of crypto assets, is expected to announce details about the guideline. At the moment, the UK is just finalizing certain significant changes in regulations, which includes […][...]

At the moment, the UK is just finalizing certain significant changes in regulations, which includes prohibitions on international businesses selling to the UK, regulations on advertising products, and even creating a mechanism to deal with operational failures.

According to reports, it appears that regulators will have more power to examine the industry. The Financial Conduct Authority (FCA) will primarily examine how the companies within the sector function. Once approved, these rules will be incorporated into the legislation that currently lies before the parliament.

The Financial Services and Markets Bill has been crafted to mainly streamline the UK’s financial sector after Brexit. The financial sector now comprises stablecoins and crypto assets as well.

Some Potential Restrictions In The Crypto Industry

At the moment, the Treasury is summarizing and establishing a combination of guidelines that will help the FCA supervise the operations, along with advertising guidelines for the industry within the country.

Reports disclose that there will be restrictions on selling cryptocurrency on the UK market from abroad. The report still remains vague on the restrictions; however, companies might be mandated to register with the FCA.

The registration procedure is quite complicated as a huge number of applicants could not manage to pass the FCA’s anti-money laundering tests, as mentioned by industry specialists. This is a sizeable bill that is not just limited to crypto regulation. The UK launched the consultation bill on crypto in 2021, but reports suggest that this procedure could move to next year owing to the fast-moving events within the industry.

FTX Collapse Has Raised Regulatory Concerns

Regulation of the cryptocurrency industry has consistently been a topic of discussion and concern, not just in the UK but across many parts of the world. Conversations regarding how businesses are scrutinized and governed have been a topic of debate.

The recent crash of FTX, as well as the state of beleaguered customers and their financial situation, has elevated concerns about the industry’s oversight. Now, regulatory bodies have started to chalk up new plans to prevent the next downfall of a crypto-related platform.

In that same light, the UK has decided to propose and regulate the industry in an effective way so as to safeguard customers. This year, the FCA started to survey the anti-money laundering procedures that are to be followed by crypto firms running their services in the UK.

The cross-party Treasury committee is scheduled to hear from the experts of the FCA and Bank of England on December 7. The discussion shall be related to the risks of crypto and the positive and negative implications of a Central Bank Digital Currency (CBDC).