The British government has unveiled “robust” cryptocurrency sector regulations following a string of industry failures.
A proposal announced Wednesday (Feb. 1) by the UK Treasury would subject crypto companies to the same oversight as traditional finance firms.
“Our robust approach to regulation mitigates the most significant risks, while harnessing the advantages of crypto technologies,” the announcement said. “This enables a new and exciting sector to safely flourish and grow, boosting jobs and investment.”
The treasury says its proposals require crypto trading platforms to define “the detailed content requirements for admission and disclosure documents” to ensure crypto exchanges have “fair and robust standards.”
Read more: UK Crypto Regulation Looks Into Ad Practices
In addition, the proposals also bolster the rules for the financial intermediaries and custodians charged with carrying out transactions and storing customer assets.
“These steps will help to deliver a robust world-first regime strengthening rules around the lending of crypto assets, whilst enhancing consumer protection and the operational resilience of firms,” the treasury said.
The proposals come amid a larger effort to regulate the cryptocurrency sector following last year’s collapse of FTX, which triggered a wave of industry bankruptcies and an international criminal investigation.
Earlier this week, the Biden administration published a roadmap urging Congress to step up its crypto enforcement work, PYMNTS reported.
“Congress needs to step up its efforts,” the roadmap said, with administration officials calling on Congress to “expand regulators’ powers to prevent misuses of customers’ assets.”
The roadmap urges legislators to increase transparency and disclosure requirements for crypto companies, while also pushing for stronger penalties for violations of illicit finance rules, and suggesting that agencies in the U.S. work more closely with international law enforcement.
PYMNTS noted that the White House plan contrasts with the views of private sector executives who say “they are keen to see crypto realize value-based integrations into future product offerings of traditional, regulated financial institutions.”
The Biden administration, meanwhile, warns against “deepening ties between cryptocurrencies and the broader financial system,” going so far as to call the idea a “grave mistake.”
The roadmap followed a speech last month by Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson, who formally called on Congress to modify a number of pieces of proposed crypto legislation to expand the agency’s oversight of the sector.
“We must never allow a good crisis to go to waste,” Johnson said, before arguing for greater CFTC authority to conduct due diligence on any company seeking to purchase a 10% or greater equity interest in market participants registered with the CFTC.
