New UK Bill Puts Crypto Under Tighter Scrutiny
- The UK is finalizing plans to launch all-encompassing regulations for the crypto industry.
- Regulators in the UK are said to have been alarmed by the collapse of the FTX exchange.
- The Financial Conduct Authority could be given full control of the crypto industry and will monitor how digital asset firms advertise and operate.
New UK Prime Minister Rishi Sunak gave verbal support for cryptocurrencies before taking up the big job. But despite Sunak’s support, UK’s planned regulatory framework is expected to increase regulatory oversight over the crypto industry. The changes to the law will increase the financial regulator’s authority and presumably restrict foreign corporations’ ability to do business in the United Kingdom.
Sources claim that the FTX collapse had an impact on how the U.K. regulatory structure has progressed. According to reports, the Treasury is putting the finishing touches on a set of regulations that would let the Financial Conduct Authority (FCA) keep an eye on how crypto firms in the UK operate and advertise. Additionally, there would be limitations on selling cryptocurrency on the UK market from other countries.
While there is little clarity on what those restrictions would be, it is possible that they would be put in place to compel the companies to comply with the FCA. Getting regulatory approval in the UK is no small feat. The FCA’s Chief Executive Officer, Nikhil Rathi, admitted that 85% of the applicants failed the anti-money laundering (AML) tests.
The FCA began examining money-laundering preventative measures at UK-based cryptocurrency businesses this year, but the agency lacked broader authority in areas such as financial mismanagement and fraud. If approved, the new regulations will grant the FCA powers to handle the collapse of companies.
The comprehensive bill has already been presented to the British Parliament and covers crypto legislation and other pressing areas. The United Kingdom, like many nations, has sought ways to bring the crypto industry under the control of regulators. The U.K. launched its consultation on cryptocurrencies in 2021, but recent developments in the sector may cause it to be extended to 2023.