UK sets ‘robust’ standards with first regulations for crypto assets, minister says

Britain’s finance ministry plans to introduce “robust” regulations for crypto assets, following the collapse of crypto exchange FTX last year, which left millions of people suffering daily losses. billion dollars.

Cryptocurrencies are currently unregulated globally, with companies only having to carry out checks to prevent money laundering. However, the UK’s Financial Conduct Authority (FCA) has said that more than 80% of license applicants cannot prove they can do this properly as “black money” flows through the sector.

Financial Services Minister Andrew Griffith said in a statement on Tuesday that the draft rules, to be published on Wednesday, would ensure strong, transparent and fair standards, consistent with traditional financial approach.

“We are steadfast in our commitment to growing the economy and enabling technological change and innovation – and this includes cryptocurrency technology,” Griffith said.

The new regulations come after rising interest rates led to a series of bankruptcies in the sector by 2022, wiping $1.4 trillion (about Rs 11.5 cores) from the value of the market. electronic money. Price of BitcoinThe most widely traded coin, has fallen by 60%.

Market trends shake confidence in cryptocurrencies, although interest in the underlying technology, commonly known as blockchain, for other uses such as payments remains.

There will be a three-month public consultation on the new plans, followed by proposals for detailed rules from the FCA.

The ministry said its approach would mitigate the most significant risks in this area.

These proposals will place the onus on crypto exchanges to define detailed content requirements for admission and disclosure documents – ensuring crypto exchanges electronics have fair and robust standards”.

There will be rules for financial intermediaries, facilitating transactions, and custodians, storing client assets.

failure of FTX and other exchanges have triggered calls for industry regulation to protect investors. Regulators are focusing on appreciating open “cryptocurrency conglomerates” that combine activities such as trading, lending and custody under one roof, but without legal protections tradition among them.

The european union finalized its first set of crypto rules.

The ministry said companies that have been authorized by the FCA will be temporarily allowed to offer their own promotions, while a new regulatory regime is in place.

© Thomson Reuters 2023

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