The government has announced that crypto trading and assets will be “robustly” regulated under new proposals published today, which will be under consultation until 30 April.
It called its proposals “ambitious plans to robustly regulate crypto asset activities.”
It said that cryptoassets – commonly known as crypto – are a relatively new, diverse and constantly evolving class of assets that have a range of potential benefits, as well as posing risks to the consumer.
It added that the crypto sector continues to experience high levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector.
In other words, the recent crypto crisis has seen companies collapse, crypto values tumble and customers lose huge sums of money.
The government said its approach to regulation mitigates the most significant risks, while harnessing the advantages of crypto technologies.
Economic Secretary to the Treasury, Andrew Griffith said: “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology.
“But we must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards.”
Under the plans the government will seek to regulate a broad suite of cryptoasset activities, similar to its approach to traditional finance.
The proposals will place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents – ensuring crypto exchanges have fair and robust standards, it said.
The proposals will also strengthen the rules around financial intermediaries and custodians – which have responsibility for facilitating transactions and safely storing customer assets.
In addition, to address industry concerns about the small number of FCA authorised cryptoasset firms who can issue their own promotions, The Treasury is also introducing a time limited exemption.
That means cryptoasset businesses that are registered with the FCA for anti-money laundering purposes will be allowed to issue their own promotions, while the broader cryptoasset regulatory regime is being introduced.
As part of the approach, the consultation will seek views on improving market integrity and consumer protection by setting out a proposed crypto market abuse regime. The deadline to submit views is 30 April 2023.
Details of the government’s consultation and call for evidence is here.
