The UK government and parliament’s approach to implementing sweeping regulations to guide the crypto-currency sector does not challenge the general perception that the technology powering the digital currency ecosystem is unique and futuristic.
The United Kingdom (UK), under the leadership of Prime Minister Rishi Sunak, is considering giving the Financial Conduct Authority (FCA) more powers to regulate the digital currency ecosystem. According to an article in the Financial Times, the collapse and bankruptcy of FTX Derivatives Exchange has given a new sense of urgency to all regulators to exercise additional control over the industry.
The new rules, which are managed by the UK Treasury, will limit the activities of foreign crypto-currency companies selling their products in the country.
The UK under Rishi Sunak’s era as Chancellor of the Exchequer has detailed plans to launch such rules that will make the crypto industry a major hub for digital currencies. The proposed new rules will limit the activities of stakeholders in this space serving as an antagonistic policy to his initial plans.
Among the oversight measures, the FCA will now exercise censorship over how crypto-currency companies advertise their products in the UK to ensure they are not misleading. The proposal will also detail the plans or approaches by which companies can be liquidated, in case they have to leave the UK or in case of bankruptcy.
All firms will be required to register with the FCA and pass the regulator’s anti-money laundering (AML) tests. According to Nikhil Rathi, the FCA’s chief executive, the agency has recorded a higher number of firms, 85 percent, failing its AML tests. Given the already stringent measures taken to license firms, stricter rules could keep others away.
While it currently does not have absolute powers, the FCA boss said the agency is very proactive in publicly warning against “the risks of investing in crypto-currencies, the potential to lose all your money.“
UK recognizes technology that powers digital currency ecosystem
The U.K. government and parliament’s approach of implementing radical regulation to guide the crypto-currency industry does not detract from the general perception that the technology powering the digital currency ecosystem is unique and futuristic.
City Minister Andrew Griffith noted in a statement last week that despite episodes of industry failures, the government’s goal remains unchanged.
“Yes, there are questions about the future of crypto – but we’d be fools to ignore the potential of the underlying technology” he said, adding that the financial services bill would establish a framework for the regulation of crypto assets and stablecoins and that the government would be “consulted on a world-leading regime for the rest of the cryptoasset market later this year.“
While the crypto industry bill is part of the larger financial services bill, its acceleration is evident in the continued collapse of key companies in the space, and the need to preserve the interest of consumers and investors in the UK.