UK Authorities Announce Big Crypto Reform

UK Authorities Announce Big Crypto Reform

The United Kingdom is launching another massive cryptocurrency regulatory reform. Announced on Wednesday, the UK’s government revealed that a public consolation has been launched that will push for the creation of a draft legislation tackling crypto regulations.

The government website details that authorities wish to increase user protection but also to provide a valid ecosystem for crypto development. Consultation will continue until April 30th, after which the next step will be taken.

Outlooks for the new crypto regulations seem to suggest a focus on curbing the participation of disreputable and scammer actors while reducing money-laundering practices.

Andrew Griffith, Economic Secretary to the Treasury, disclosed that crypto technology can be committed to the wellbeing of the economy, and can be used to further change and innovation. But, Griffith adds, customers must be protected, and standards and legal transparency must be respected.

In 2022 the FCA was granted the responsibility of supervising crypto-based businesses, in relation to terror financing risks and potential money laundering practices. All companies have to pass by the FCA as a result, if they wish to provide services in the UK.

Yet, there is a clear limit to the FCA’s power. For one, individuals are not covered by the Financial Services Compensation Scheme in case funds are lost either deliberately or not due to the crypto business’ actions.

Moreover, the UK authorities still pointed out the inherent volatility of cryptocurrencies, and the risks that come with dealing within this industry, pointing to the recent collapse of the FTX exchange as a prime example.

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