Britain’s finance ministry sets out draft rules to regulate crypto assets
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The new rules would cover crypto-related admission to a trading platform and making a public offer, among other services.
PHOTO: REUTERS
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LONDON –Britain’s finance ministry set out draft rules on Wednesday to regulate crypto assets, saying ongoing turbulence in the sector and the collapse of exchange FTX
Crypto assets, such as Bitcoin, have little direct regulation globally, but regulators are taking a closer look after the downfall of FTX in 2022, which left millions of investors nursing losses totalling billions of dollars, some of them in Britain.
“Our view is that this reinforces the case for clear, effective, timely regulation and proactive engagement with industry,” said Financial Services Minister Andrew Griffith in proposals put out to public consultation.
“This includes a proposal to bring centralised crypto-asset exchanges into financial services regulation for the first time, as well as other core activities like custody and lending.”
The new rules would cover crypto-related admission to a trading platform, making a public offer, executing payment transactions or remittances, arranging deals, operating a platform, custody, and mining transactions, or operating a node on blockchain.
Currently, crypto firms need only show they can comply with anti-money laundering safeguards.
Binance, the biggest crypto exchange, on Wednesday said it welcomed the public consultation as it has “vocally supported the need for effective and appropriate regulation to help with the mainstream adoption of digital assets”.
Surveys show that 5 per cent to 10 per cent of adults in Britain now own crypto assets, an increase of more than 100 per cent over the past one to two years, with participation by institutional investors also growing, the ministry said.
The sector shrank dramatically in 2022, with total global market capitalisation falling to below US$1 trillion (S$1.3 trillion), from a peak of roughly US$3 trillion.
Britain had already launched a consultation on regulating stablecoins – a subset of crypto assets which are backed by currencies or other assets, in January 2021 – but decided to broaden out to include all of the crypto sector.
After the three-month consultation, there will be secondary legislation later in 2023, and detailed rule proposals for public consultation from the Financial Conduct Authority. REUTERS
