The UK Finalizes Plan For Crypto Regulation
The United Kingdom is on its way to finalizing plans for regulations for the use of cryptocurrencies in the country. The hastiness comes amid growing concern over the potential risks posed by the use of digital currencies and also recent developments in the wake of the FTX debacle.
- The United Kingdom is on its way to finalizing plans for regulations for the use of cryptocurrencies in the country.
- Sources say that this move will involve close of companies’ operations and marketing efforts in the crypto industry.
According to reports from Financial Times, the whole package will also cover limits on foreign corporations selling into the UK as well as curbs on product promotion.
With this development, the Financial Conduct Authority is set to gain new enforcement abilities over digital assets in the UK. According to three anonymous sources close to the Treasury, these will involve close monitoring of companies’ operations and marketing efforts within the crypto industry. The new powers will be part of larger financial services and markets legislation now being debated in parliament, which will underpin the country’s approach to financial regulation in the aftermath of Brexit.
The Financial Conduct Authority has taken action to tighten regulation of the UK’s crypto industry this year, including inspections into money-laundering controls. However, its influence is limited in other key areas such as fraud prevention and customer protection.
The regulations package also includes procedures for dealing with a company’s collapse. The crypto industry is now weathering a storm centred on the implosion of FTX following a run on its deposits after doubts were raised regarding its ties with sibling business Alameda Research and its management of customer monies. According to the Financial Times, ministers will soon begin a survey on the new regulatory system.
Overall, the new regulations on the use of cryptocurrencies in the UK are a welcome development for many. They provide a clear framework for the operation of exchanges and help to reduce the risks associated with the use of digital currencies. While there may be some negative impact on the use of cryptocurrencies for legitimate purposes, the overall benefits of the new regulations are likely to outweigh any potential drawbacks.