The UK government has unveiled proposals to put cryptoassets into the same regulatory regime as traditional financial services.
According to Finextra, consultation proposals include strengthening rules for crypto trading platforms and a robust regime for crypto lending by tightening rules around financial intermediaries and custodians.
The consultation laid out design features of the regime covering themes such as prudential requirements, data reporting, consumer protection, location policy and operational resilience
The paper also called for regimes for a range of issues that apply across cryptoasset activities and business models, such as market abuse, cryptoasset issuance and disclosures.
The Government says the consultation will seek views on improving market integrity and consumer protection by setting out a proposed crypto market abuse regime.
In a first notable step, the UK Government is focused on bringing the promotion of cryptoassets within the scope of financial promotions legislation, subject to FCA oversight in line with the same standards held for stocks, shares, and insurance products.
“This approach delivers on the original policy intention of the measure to promote innovation, enhance consumer protection and ensure that cryptoasset promotions can be held to equivalent standards as promotions of financial services products with similar risk profiles.”
The consultation will close on 30 April and the feedback generated will be fed into the legislative process. Once legislation is laid, the Financial Conduct Authority will consult on its detailed rules for the sector.
Economic Secretary to the Treasury Andrew Griffith said, “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology.
“But we must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards.”
Last year, the Financial Stability Board published a proposed framework for the international regulation of crypto-asset activities.
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