• The United Kingdom has announced its plans to regulate the cryptocurrency industry within the country.
• The proposals will place responsibility on exchanges and firms to define detailed disclosure documents and ensure responsible practices.
• The consultation will seek to create a framework with clear guidelines for responsible practices and safely store customer assets.
The United Kingdom’s Regulation of Cryptocurrency
The United Kingdom government has released its plans to regulate the cryptocurrency industry within the country, citing „high levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector.“
Responsibility on Exchanges and Firms
Specifically focusing on trading and lending, these proposed regulations detail how exchanges and firms must define detailed content requirements for disclosure documents, ensuring „fair“ standards. In order to ensure safety of customer funds, this consultation seeks to create a framework with clear guidelines for responsible practices.
This consultation also highlights the necessity for cryptocurrency custodial actors and intermediaries to responsibly facilitate transactions and safely store customer assets. This is especially important in light of recent events throughout the cryptocurrency space that have left millions of customers without access to their funds.
Today’s consultation will conclude on April 30, 2023, after which the government will consider feedback and create a response. Once legislation is laid, the Financial Conduct Authority will consult on its detailed rules for the sector.
Economic Secretary to the Treasury Andrew Griffith commented: “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – including cryptoasset technology“. The United Kingdom is taking serious steps towards regulating their cryptocurrency industry by placing responsibility onto exchanges/firms, creating a framework with clear guidelines for responsible practices, as well as protecting customers from potential losses due to irresponsible behavior or frauds within this space.