The UK government will set out plans to regulate crypto assets activities such as trading, lending, and custody under the same regime as traditional finance services. In addition, the government intends to provide confidence and clarity to consumers and businesses that deal with cryptocurrencies.
With this, the government is initiating a consultation on a series of rules for crypto trading platforms, along with a robust world-first regime for crypto lending.
As per the country’s Treasury department, the proposed guidelines would include exchanges to write detailed requirements on admission standards. Under these guidelines, the exchanges would also require disclosures for token issuers when listing new assets.
The consultation will seek responses until April 30. Moreover, the UK plans to strengthen rules around custodians of digital assets and financial intermediaries. As such, all firms are required to meet prudential regulations and standards on data reporting, operational resilience, and consumer protection.
Considering a raft of high-profile collapses, scandals, and bankruptcies, the UK took a step to implement stricter rules to tighten its scrutiny of the crypto asset class.
Also read: UK to announce Plans for Regulation of the Crypto Sector
The aim is to prevent the mixing of consumer and business assets, as well as traditional market expectations on corporate governance and bookkeeping.
On the other hand, crypto lenders will need to provide clear contractual terms of products and services to users. As per the new “crypto market abuse regime,” intermediaries will also need to demonstrate they can avoid conflicts of interest and carry out sufficient processes to manage crypto asset dealings.
This will help in detecting market abuse as intermediaries will be required to submit suspicious transaction order reports (STORs) to the regulator. This would be done to mitigate risks of so-called “pump and dump” fraud and insider trading within crypto firms.
Economic Secretary to the Treasury, Andrew Griffith said that the government wants to remain steadfast to grow the economy and enable technological change and innovation including crypto asset technology.
“But we must also protect consumers who are embracing this new technology — ensuring robust, transparent, and fair standards,” he added.
