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The United Kingdom has released its first consultancy on crypto trading and lending regulation in the country.
The United Kingdom has released its plans to regulate the cryptocurrency industry domestically.
The announcement highlighted that “high levels of volatility and a number of recent failures have exposed the structural vulnerabilities of some business models in the sector,” among other reasons, have led to a new set of regulatory guidelines.
Focusing specifically on trading and lending, the report describes how the UK government “will seek to regulate a wide range of cryptoasset activity, consistent with its approach to traditional finance.” It details how the proposal will place the onus on cryptocurrency exchanges and companies to define detailed content requirements for disclosure documents, ensuring “fair” standards. To ensure the safety of customer funds, the consultancy will endeavor to create a framework with clear guidelines for responsible practice.
“We remain steadfast in our commitment to growing the economy and enabling technological change and innovation – and this includes cryptoasset technology,” said Secretary of Economics for the Department of Finance Andrew Griffith.
The consultation also highlighted the need for cryptocurrency custodians and intermediaries to responsibly facilitate transactions and securely store customer assets. This is particularly important considering recent events across the cryptocurrency space which have left millions of customers without access to their funds.
Today’s consultations will end on April 30, 2023, after which the government will consider the feedback and make a response. “Once the law is enacted, the Financial Conduct Authority will consult on the detailed rules for the sector,” the announcement said.
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