The regulatory amendments will broaden the powers of the country’s financial regulator and put the crypto industry under tighter scrutiny.
Despite the Conservative Party’s rhetorical embracement of crypto under the new Prime Minister Rishi Sunak, the upcoming regulatory framework will reportedly tighten scrutiny over the industry. The legislation updates will broaden the powers of the financial regulator and probably limit foreign companies’ operations in the United Kingdom.
According to a Financial Times report, the FTX collapse has influenced the course of the regulatory regime in the U.K. Reportedly, the Treasury is finalizing a package of guidelines that will enable the Financial Conduct Authority (FCA) to monitor the operations and advertising of crypto companies in the country. There also would be restrictions on selling crypto on the U.K. market from abroad.
Although the report doesn’t reveal more specifics on those restrictions, assumably, they’d be enforced to force the companies to register with the FCA. The procedure is tough enough already, as 85% of the applicants did not pass the FCA’s anti-money laundering (AML) tests, according to its chief executive Nikhil Rathi.
The guidelines are being prepared as a part of the financial services and markets bill. The large bill, which includes but is not limited to crypto regulation, has already been introduced to the British Parliament. While the U.K. launched its consultation on crypto in 2021, according to the FT sources, it could slip into 2023 due to “fast-moving events” in the industry.
Related: How can UK-based businesses accept Bitcoin?
However, on Dec. 7 the cross-party Treasury committee will hear out the experts from the FCA and Bank of England on the risks of crypto and the “pros and cons” of central bank-issued cryptocurrency (CBDC). The hearing will also include the talk of the investigative journalist, who’ve covered the investments, made by British football fans under the influence of crypto ads.
In early November, Members of the Digital, Culture, Media and Sport Committee opened an inquiry to hear from the public on the potential benefits and risks of nonfungible tokens, or NFTs, and blockchain on the country’s economy.