UK Implements Crypto Regulation: Updates To Watch
Currently, there are no comprehensive crypto regulations in place in the UK. But, after the calamitous year that crypto has been through, it has become clear that the sector needs some regulation. The British authorities have therefore decided to take matters into their own hands for the safety of investors.
UK to Adapt Existing Regulations to Crypto
The UK government has claimed that up to 10% of the population in the UK today hold crypto. In this context, it is committed to putting in place a solid regulatory framework for digital assets. To this end, he made regulatory proposals aimed at “managing” the risks of the new industry. He indicated that these are currently the subject of consultation.
However, the UK authorities do not intend to create a tailor-made regulatory framework for crypto. They intend to use the regulations that already exist in the country. The idea is to allow cryptos to have “the trust, credibility and regulatory clarity” of the existing system, according to the Treasury.
The UK government should therefore apply the UK Financial Services and Markets Act 2000 (FSMA) to cryptos. It intends to follow a principle of “same risk, same regulatory result”. It will thus create a form of fair competition between TradFi services and new financial services.
The Treasury has suggested that it expects not all crypto businesses to adhere to its regulatory system. He explained that some of them will surely prefer to continue offering their services in more liberal offshore jurisdictions.
The Government Explains The Usefulness of Its Regulatory Proposals
The Treasury outlined the benefits of its crypto regulatory proposals. He then said that they will help establish rules for fair, clear and non-misleading promotions of cryptos. They should also allow for more robust reporting requirements.
The Treasury’s proposals also aim to adopt regulations preventing so-called “pump and dump” practices. We talk about these when an individual artificially boosts the value of a crypto before its sale.
The British government wants to put in place regulations that, on the one hand, mitigate the significant risks associated with cryptos. On the other hand, this regulation will make it possible to best exploit the advantages of crypto technologies. Andrew Griffith, Economic Secretary to the Treasury, explained that the government is committed to “ enabling technological change and innovation ”.
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This article is originally published on cointribune.com