UK Unveils Regulatory Guidelines for Crypto Industry: Ensure Fair Standards

Summary

• The government of the United Kingdom has announced plans to regulate the cryptocurrency industry with a set of guidelines.
• These rules focus on trading and lending, and will require disclosure documents, responsible practices, and safe storage of customer funds.
• The consultation period for these regulations finishes at the end of April 2023, after which the Financial Conduct Authority will create detailed regulations.

UK Regulation of Cryptocurrency Industry

The United Kingdom has released its plans to regulate the cryptocurrency industry within the country. The announcement highlights that “high levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector,” amongst other reasons, have led to the new set of regulatory guidelines.

Focus on Trading & Lending

Specifically focusing on trading and lending, the report describes how the United Kingdom’s government “will seek to regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance.” It details how proposals will place responsibility on the cryptocurrency exchanges and firms to define detailed content requirements for disclosure documents, ensuring “fair” standards. In order to ensure the safety of customer funds, the consultation will seek to create a framework with clear guidelines for responsible practices.

Government Commitment

Economic Secretary to the Treasury Andrew Griffith remarked that “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology”.

Safety & Security Measures

The consultation also highlighted 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.

Conclusion Date & Regulations 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 forthe sector,” states the announcement.