Proposals for Crypto asset regulation is coming to the UK, with the government planning to “robustly” regulate the cryptocurrency industry.
Under new plans, the regulation is designed to improve consumer confidence and allow the sector in the UK to “thrive”.
Proposals for UK Crypto regulation include regulating digital assets, protect consumers, and make Britain a “global hub” for crypto asset technology.
Following a consultation, the Treasury plans to introduce regulations that will ensure:
- Customer assets are returned to them if a crypto business goes bust
- Lay down rules on crypto-asset promotions which are fair, clear and not misleading;
- Enhance data-reporting requirements, including with regulators
- Implement new regulations to prevent so-called pump and dump, where an individual artificially inflates the value of a crypto asset before selling it.
Falling under the scope of regulations will be the regulation of crypto exchanges, lending activities, and how digital assets are stored. The government said crypto assets have a “range of potential benefits as well as posing risks to the consumer.”
The statement also explained that the planned regulatory framework for cryptocurrency is not designed to curtail ambitions in the space but to “enable a new and exciting sector to safely flourish and grow, boosting jobs and investment.”
The proposals also highlighted what the government sees as structural vulnerabilities in some business models in the sector.
Regulations will introduce trading platform rules and help establish a “robust world-first regime, strengthening rules around the lending of crypto-assets.”
As part of the consultation, the Treasury seeks views about improving the digital-asset market integrity and boosting consumer protection, introducing a proposed “crypto market abuse regime.”
Crypto trading venues will be required to implement robust standards for admission, including detailed disclosure documents. Financial intermediaries and custodians will be subject to stricter rules to ensure safer transactions and storage of customers’ digital assets.
Commenting on the announcement from the Treasury, economic secretary to the Treasury Andrew Griffith said:
“We remain steadfast in our commitment to grow the economy and enable technological change and innovation, and this includes crypto-asset technology.
“But we must also protect consumers who are embracing this new technology, ensuring robust, transparent and fair standards.”