The Financial Conduct Authority will now have the authority to regulate operations involving crypto assets if the updated bill is approved. The bill already addressed stablecoin regulation from the outset.
A change to the Financial Services and Markets Bill, which is now being debated in the UK Parliament, would allow for the regulation of crypto assets in addition to financial advertising and other legal activities. Andrew Griffith, a member of parliament and the Treasury’s financial secretary, drafted the amendment.
The 335-page bill was introduced in July, and on September 7, the House of Commons held its second reading. The accompanying explanatory statement for the amendment states that it would:
“[…] clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate cryptoassets and activities relating to cryptoassets.”
The UK’s banking watchdog, the Financial Conduct Authority (FCA), released a “Dear Chief Executive” letter Aug. 9, which detailed its supervisory strategy over financial firms’ so-called “alternatives portfolio.” The letter stated: “We will publish final rules for the promotion of crypto assets once the Treasury formalises legislation to bring these into our remit.”
The majority of cryptocurrency-related businesses in the UK are not currently regulated by the FCA, though they do have the choice to do so and will be forced to do so in 2019. Many applicants have found the registration process to be difficult because it only considers anti-money laundering and countering the financing of terrorism measures for now.
In August, the FCA also took action over the promotion of high-risk financial products, and it was made clear that while the agency was not yet regulating crypto assets, they may be harmful. The nation’s Advertising Standards Authority has increased the vigilance with which it examines advertisements for cryptocurrencies.
In September, Richard Fuller, Griffith’s predecessor as financial minister, declared that the government was dedicated to making the U.K. a “center for crypto technology.” The Markets in Crypto-Assets bill was approved on October 10 by the Economic and Monetary Affairs Committee of the European Parliament, and a full parliamentary vote is shortly to come.
