The FTX fiasco was a major warning sign in the industry. Right from rival firms and regulators to traders and investors, almost everyone had to take a step back. Cryptocurrency firms have implemented precautionary measures, while governments around the world have been busy tightening the regulatory screws.
Hong Kong recently revealed its regulatory plans for the industry. As reported earlier, the special administrative region will not allow algorithmic stablecoins and issuers will require licenses for stablecoins.
Britain seems to be standing next in the queue now. A recent Reuters report revealed that U.K.’s finance ministry intends to roll out “robust” regulations for cryptocurrency assets.
Financial Services Minister Andrew Griffith hinted that the draft rules would ensure robust, transparent, and fair standards. He further asserted that they would be consistent with the approach to traditional finance. Griffith added,
“We remain steadfast in our commitment to grow the economy and enable technological change and innovation—and this includes cryptoasset technology.”
Also Read: USA: New Crypto Committee Created To Focus On Bitcoin & Co.
What to expect from the new cryptocurrency rules?
Once the new regulations are out, there will be a three-month public consultation period. That will be succeeded by proposals for detailed rules from the FCA. The ministry’s approach will reportedly help curb risks in the sector.
According to the FCA,
“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.”
Notably, the new rules will be relevant for financial intermediaries and custodians. The ministry clarified that firms already authorized by the FCA will be temporarily allowed to issue their own promotions when the new regulatory framework is introduced.
A recent report showed that the U.K. is proving to be far tougher on cryptocurrency companies than the U.S. Specifically, 85% of firms attempting to register with a U.K. regulator were denied approval. Reportedly, they “were unable to demonstrate they met the required, minimum standards. Alongside, some U.S. based companies withdrew their applications altogether.
Thus, if the new rules prove to be stringent, then other companies might be compelled to move their operations from the U.K.
Read More: UK Proving to be Tougher on Crypto Companies Than the US