The new rules come after rising interest rates led to a string of bankruptcies in the sector in 2022, wiping $1.4 trillion off the value of the crypto market. The price of bitcoin, , the most widely traded, plunged 60%. The market rout shook confidence in cryptocurrencies, though interest in the underlying technology, most commonly known as blockchain, for other uses like payments remains. There will be a three-month public consultation on the new plans, followed by proposals for detailed rules from the FCA. The ministry said its approach would mitigate the most significant risks in the sector. "These proposals will place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents - ensuring crypto exchanges have fair and robust standards," the ministry said. There will be rules for financial intermediaries, which facilitate transactions, and custodians, which store customer assets. The failure of FTX and other exchanges triggered calls for regulation of the industry to protect investors. Regulators are focusing on prising open "crypto conglomerates" which combine activities like trading, lending and custody under one roof, but with traditional regulatory safeguards between them absent. The European Union is already finalising its first set of crypto rules. Firms already authorised by the FCA would be temporarily allowed to issue their own promotions, while the new regulatory regime is being introduced, the ministry said. (Reporting by Huw Jones; Editing by Sharon Singleton)
Messaging: huw.jones.thomsonreuters.com@reuters.net)) By Huw Jones
LONDON, Jan 31 (Reuters) - Britain's finance ministry
plans "robust" regulations for crypto assets, following the
collapse of crypto exchange FTX last year, which left millions
of people nursing billions of dollars in losses.
Crypto is currently unregulated globally, with firms only
having to carry out checks to prevent money laundering. However,
Britain's Financial Conduct Authority (FCA) has said that more
than 80% of licence applicants were unable to show they could do
this properly as "dark money" flows through the sector.
The draft rules, to be published on Wednesday, would ensure
robust, transparent, and fair standards, consistent with the
approach to traditional finance, Financial Services Minister
Andrew Griffith said in a statement on Tuesday.
"We remain steadfast in our commitment to grow the economy
and enable technological change and innovation – and this
includes cryptoasset technology," Griffith said.
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