The subject of how crypto can be most effectively regulated – with appropriate benefits for all parties involved – has undoubtedly long been a keenly contested topic of debate.
And now, after much commentary and speculation on what approach the UK Government would and should take to regulating the crypto space, HM Treasury has set out more detail on exactly this.
More specifically, the UK Government has said that it intends to “robustly regulate cryptoasset activities – providing confidence and clarity to consumers and businesses alike”. But what does all of that mean for both businesses and individuals?
Treasury working on a principle of “same risk, same regulatory outcome”
With the past year having been an up-and-down one for the global crypto industry to say the least, many eyes were on the UK Government to see what plans it would put in place to regulate the sector. That was especially so in light of now-Prime Minister Rishi Sunak’s pledge, when he was Chancellor of the Exchequer, to turn the country into a “global hub for cryptoasset technology.”
In the event, UK ministers are looking to use existing regulations to help regulate crypto activities in the country, instead of creating a bespoke regime.
This approach, the Treasury has said, will enable crypto to benefit from the “confidence, credibility and regulatory clarity” of the UK’s existing system for financial services, as outlined in the Financial Services and Markets Act 2000 (FSMA).
The Treasury said that it wished to create a level playing field between traditional and newer financial services, based on the principle of “same risk, same regulatory outcome”.
To this end, the Government said it was consulting on proposals to put in place rules on the crypto industry that would be fair, clear, and not misleading. It added that it was looking to optimise data-reporting requirements – including with regulators – in addition to implementing new regulations to guard against “pumping and dumping”.
The latter term refers to the practice of someone artificially inflating a crypto asset’s value, and then selling it.
The overarching aim of the plans, according to ministers, is to “mitigate the most significant risks” that crypto technologies present, at the same time as “harnessing their advantages”.
The consultation on the UK’s crypto future has now begun
The Treasury’s consultation was published on 1st February, and will close on 30th April 2023. The Government said that following this process, it would consider the feedback received, and work to outline its consultation response.
After the laying down of legislation, the UK’s Financial Conduct Authority (FCA) is expected to consult on its own detailed rules for the crypto industry.
Andrew Griffith, Economic Secretary to the Treasury, said that the Government continued to be “steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology.
“But we must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards.”
More information on the UK Government’s plans can be found in the Treasury’s recent press release. Here at Bitcoin PR Buzz, we will certainly watch ensuing developments closely.
In the meantime, don’t forget that if you require the benefit of cryptocurrency press relations expertise, partnerships, and experience, our team can be at the ready to help. Simply email contact@bitcoinprbuzz.com for further details.