UK Takes Major Step Forward in Regulating Crypto – Temporary Backtrack on Crypto Promotion Guidelines
The UK Treasury is set to deliver "ambitious plans to robustly regulate cryptoasset activities" on a par with traditional finance, but will also step away from the plan to apply stock-like standards to crypto promotions - for now.
The announcement published by the UK government, in which it said that it planned to "provide clarity to consumers and businesses," stated that,
"Under plans set out by the government today (1 February), it will seek to regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance."
The proposals prepared by the government will "help to deliver a robust world-first regime strengthening rules around the lending of cryptoassets," and they will do so by:
The consultation will also seek views on improving market integrity and consumer protection by "setting out a proposed crypto market abuse regime," said the press release.
The government further said it would temporarily backtrack on a previous decision to set the regulation of crypto promotions at the level of the standards applied to stocks, shares, and insurance products.
The press release stated that,
"HM Treasury is also introducing a time limited exemption. Cryptoasset businesses that are registered with the [Financial Conduct Authority (FCA)] for anti-money laundering purposes will be allowed to issue their own promotions, while the broader cryptoasset regulatory regime is being introduced."
As for the reasons behind this latest announcement, the Treasury suggested that is related to the nature of emerging technology markets, where high levels of volatility are a common sight. In addition to that, there have been a number of recent crypto company failures that "have exposed the structural vulnerability of
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