The UK Government Plans to Publish the Draft Rules for Cryptocurrency Regulations
The UK government is all set to publish the first draft rules for cryptocurrency regulations in the country. The proposal from HM Treasury seek to protect retail investors by treating crypto institutions similar to traditional financial firms.
Besides, the Treasury added that the goal is to protect against "the most significant risks” while also encouraging innovation and helping the country garner the benefits of cryptocurrency and blockchain technology.
Andrew Griffith, economic secretary to the Treasury noted: "We remain 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.”
The Treasury further added that the public consultation will run through April 30 wherein it will seek views on improving consumer protection and market integrity by setting out a “proposed crypto market abuse regime”.
Furthermore, the proposed plan also seeks to make exchanges responsible for Know Your Customer checks, which involves "admission and disclosure documents”. It also seeks to strengthen controls around crypto custodians and other financial intermediaries. The Treasury noted that the goal is to create fair and robust standards for crypto exchanges.
Post some high-profile collapses and crashes last year, there have been widespread calls of regulations in UK’s cryptocurrency market. However, the opposition party in the UK remains unimpressed with this proposal. Labor’s shadow city minister, Tulip Siddiq, reiterating called for a “crackdown on the crypto wild-west for months."
She further blamed the British government of inaction on crypto regulation and putting "millions of British consumers' savings ... at risk by the collapse of cryptocurrencies while crypto-related scams have hit record levels”. "All the Conservatives are promising is further consultations — we need action now,” she added.
In another news, the United Kingdom has emerged as a safe haven for crypto and forex scams. Investigation by the Bureau of Investigative Journalism and the Observer noted that over 160 companies have been accused of running fraudulent crypto exchange scams in the country.
The report notes that the country’s “lax regulation” allows organized crime groups to use UK as the base for their scams. The report also highlights that victims were approached either on social media or through dating apps. Several victims also stated that the companies appeared more legitimate since they were based in the UK.
This puts a strong case for the regulators to further tighten up their regulatory laws for crypto.