UK Finance Ministry to Propose Broad Rules for Crypto, Invites Industry Feedback
The Treasury also gave crypto companies a time limited exemption to approve their own crypto promotions until more regulation comes.
The U.K.’s finance ministry is proposing new rules to govern multiple areas of the crypto sector and wants stakeholders to weigh in.
The hotly anticipated consultation, to be published by His Majesty’s Treasury on Wednesday, asks for feedback from industry members and experts on rules that focus on protecting consumers that also align with the country’s ambition to become a hub for crypto.
Some proposals will place more responsibility on trading venues, such as crypto exchanges, to define and detail requirements for admission and disclosure documents, the Treasury said in a statement to the press.
The proposed rules also target financial intermediaries such as custodians and seek to set up a regime around the lending of crypto assets. The Treasury is inviting feedback on a planned market abuse regime aimed at improving market integrity, consumer protection and operational resilience of firms. The consultation also proposes prudential and data reporting requirements for crypto companies.
Regulators around the world are calling for more rules for the crypto industry in the aftermath of the collapse of crypto exchange FTX and stablecoin issuer Terra that sent ripples through the industry.
“We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes crypto asset technology,” Andrew Griffith, economic secretary to the Treasury, said in a press release. “But we must also protect consumers who are embracing this new technology - ensuring robust, transparent, and fair standards.”
Meanwhile, the U.K. is trying to catch up with the European Union, which is in the last stages of approving its landmark Markets in Crypto Asset regulation that focuses heavily on stablecoins and will set up a licensing regime for service providers.
The U.K.'s wide-ranging Financial Services and Markets Bill, which could give crypto regulators more powers of oversight, is being debated in Parliament and is expected to be finalized by April.
The local crypto industry has been hoping for some clarity on how to operate in the interim. The industry raised concerns about how it should be handling crypto promotions and advertising – something the upcoming rules indicated was not allowed without approval.
In Tuesday’s announcement, the Treasury said that it is introducing a “time limited exemption” that will enable crypto asset businesses that are registered with the U.K.'s financial regulator under its anti-money laundering regime to issue their own promotions while the industry awaits more rules.
The consultation will be open till April 30 after which the government will consider the feedback and work on its response.
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