On Friday, an amendment document was released in connection with the United Kingdom’s Financial Services and Markets bill (1). This paper gives the impression that the United Kingdom’s government wants to regulate cryptocurrency and prohibit unlicensed service providers.
The Minister of Financial Services, Andrew Griffith, made the following statement in the amendments paper: “to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate cryptoassets and activities relating to cryptoassets. Cryptoasset is also defined, with a power to amend the definition”
The revisions will provide the UK government with a more comprehensive regulatory framework for cryptocurrencies if the bill is passed. In particular, the measure will give the Financial Conduct Ability (FCA) and HM Treasury new authority to oversee the regulation of cryptocurrencies.
By November 3, all further amendments to the measure will have been exhausted. On the other hand, there is now a lot of uncertainty around Prime Minister Liz Truss, who submitted her resignation on Thursday, so the schedule may need to be adjusted at some point in the future.
UK Governments Stance on Crypto
The Financial Conduct Authority (FCA) is currently in charge of most of the UK’s crypto regulatory powers. This is because the UK Government has granted the FCA the authority to regulate the advertising and promotion of crypto assets within its already established oversight framework.
In July of 2020, the government of the United Kingdom (2) expressed concern that the absence of regulation concerning cryptocurrencies and the financial products associated with them frequently leaves investors in the cryptocurrency industry without the same protections granted to retail investors, such as authorized recourse and compensation.
And as a consequence of this, the United Kingdom government proposed that the supervision of crypto asset promotions already exercised by the Financial Conduct Authority should be sufficient and that there should not be a need for an entirely new regulatory structure created specifically for digital assets.
“If advertisements by illegal firms are misleading or don’t detail the hazards, then individuals can end up losing money,” said City Minister Glen. “People can end up losing money.” Because of this, we aim to implement additional safeguards around promoting financial products and services, including the advertising of crypto assets, while maintaining our commitment to ensuring that customers have access to a diverse selection of offerings.