UK Proposes Bringing Crypto Under Regulatory Eye
The proposed amendments come after the UK sought to regulate stablecoins as a form of payment in July
Houses of Parliament in London | Source: Shutterstock
key takeaways
- Amendment to Financial Services and Markets Bill clarifies “powers relating to financial promotion and regulated activities” would regulate crypto
- Financial Conduct Authority (FCA) said in August it was waiting on laws from Parliament about how to regulate crypto marketing
A proposed amendment to the UK’s Financial Services and Markets Bill would bring crypto under its scope.
The new clause, introduced Friday by Parliament member Andrew Griffith, is meant “to 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 Treasury said in July it would seek to regulate “certain types” of stablecoins as a form of payment following the collapse of Terra’s algorithmic stablecoin earlier this year. The country introduced the Financial Services and Markets Bill to Parliament that month.
Financial Markets Infrastructure Sandboxes, included in the proposed bill, would also be created in a bid to allow firms to test new technologies and practices.
The proposed amendment comes after the UK’s Financial Conduct Authority (FCA) finalized stronger rules in August to ensure that firms marketing “high-risk investments” include better risk warnings.
The agency noted at the time that the regulations would not apply to crypto promotions until Parliament confirms via legislation how crypto marketing would be brought under the FCA’s remit.
“These rules are likely to follow the same approach as those for other high-risk investments,” the FCA said in the August statement. “Crypto remains high risk so people need to be prepared to lose all their money if they choose to invest in cryptoassets.”
The European Union, which separated from the UK when Brexit took effect in 2020, has similarly moved to regulate crypto, as lawmakers voted in favor of the EU’s Markets in Crypto Assets bill (MiCA) earlier this month.
MiCA, expected to go into effect in 2024, is set to oversee all cryptoassets that are not regulated by existing financial services legislation.
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