FCA Seeks Feedback on Crypto Market Regulation in UK

At some stage the UK government is bound to roll out cryptocurrency, if only to raise more cash for foreign wars, pet NGO projects and the UK benefits system. The question of how those imaginary currencies are regulated is a bit tricky. Secure transactions, proof of ownership, purchase limits, or insurance if it’s all stolen by hackers – these are all big issues as regards confidence in the market.

Here’s the word;

We are asking for views on new proposals as the next step in shaping the UK’s crypto rules. These proposals continue our progress towards an open, sustainable and competitive crypto market that people can trust.

We want a market where innovation can thrive, but where people understand the risks. Regulation cannot – and should not – remove all risk. Instead, it should make sure anyone investing in crypto does so with their eyes open.

Our proposals apply a similar approach to crypto as we do in traditional finance: clear information for consumers, proportionate requirements for firms, and flexibility to support innovation.

What we’re consulting on:

• Admissions and disclosures – Rules for listing cryptoassets and what firms must tell investors, so people have the facts before they invest.
• Market abuse – Measures to stop insider trading and manipulation, so markets are fair.
• Cryptoasset trading platforms – Standards for exchanges to keep trading safe and reliable.
• Intermediaries – Requirements for brokers and other middlemen, so they act responsibly.
• Staking – Making sure the risks are clear when firms offer staking – a service that lets you lock up your crypto for a reward.
• Lending and borrowing – Rules to protect both crypto lenders and borrowers.
• Decentralised finance (DeFi) – DeFi lets people trade, lend and borrow using crypto without a middleman. We’re asking if the same rules that apply in traditional finance should also apply here.
• Prudential requirements – Financial safeguards for firms, so they can better manage risk.

These proposals build on feedback from earlier discussions and new research published today. They are aligned with new government legislation laid yesterday and reflect our commitment to getting the balance right.

David Geale, executive director for payments and digital finance at the FCA, said:

“Regulation is coming – and we want to get it right. We’ve listened to feedback, and now we’re setting out our proposals for the UK’s crypto regime.

“Our goal is to have a regime that protects consumers, supports innovation and promotes trust. We welcome feedback to help us finalise these rules.”

We’ve made significant progress in delivering our crypto roadmap and are helping firms meet our standards and become registered while we wait for further legislation.

While we work closely with partners to deliver the UK’s crypto rules, people should remember crypto is largely unregulated – except for financial promotions and financial crime purposes.