The regulatory amendments will broaden the powers of the country’s financial regulator and put the crypto industry under tighter scrutiny.
Despite the new Prime Minister Rishi Sunak’s rhetorical support for cryptocurrencies, the upcoming regulatory framework is expected to increase industry scrutiny.
The legal revisions will likely restrict foreign companies’ operations in the UK while increasing the financial regulator’s authority. The Financial Times reported that the FTX collapse had an impact on how the U.K. regulatory system developed.
According to reports, the Treasury is putting the finishing touches on a set of regulations that will let the Financial Conduct Authority (FCA) keep an eye on how crypto companies in the nation operate and advertise.
Additionally, there would be limitations on selling cryptocurrency on the UK market from outside. Although the report doesn’t go into further detail regarding those restrictions, it is conceivable that they would be put into place to compel the companies to register with the FCA.
According to FCA Chief Executive Nikhil Rathi, the process is difficult enough as it is, as 85% of the applicants failed the FCA’s anti-money laundering (AML) tests.
The financial services and markets bill includes the guidelines, which are currently being prepared. The substantial bill has already been presented to the British Parliament and includes, but is not limited to, crypto regulation.
The FT sources claim that although the U.K. started its consultation on cryptocurrencies in 2021, “fast-moving events” in the sector may cause it to be delayed until 2023.
But on December 7, a bipartisan Treasury Committee will hear from FCA and Bank of England experts about the dangers of cryptocurrency and the “pros and cons” of central bank-issued cryptocurrency.
The investigative journalist who covered the investments made by British football fans under the influence of cryptocurrency advertisements will also speak during the hearing.
Members of the Digital, Culture, Media and Sport Committee launched an inquiry in early November to gather input from the public on the potential advantages and disadvantages of nonfungible tokens, or NFTs, and blockchain technology for the national economy.
