UK Government Launches Robust Cryptoasset Drafts

BUSINESS

The government has made public ambitious plans to strictly regulate cryptoasset activities in order to safeguard consumers and boost the economy. These assets have a variety of potential advantages, as well as risks for consumers.

The crypto industry continues to experience high levels of volatility, as is typical of emerging technology markets, and a number of recent failures have revealed the structural vulnerability of some of the sector’s business models.

The most significant risks are mitigated by the strict regulation implemented by the UK government, which also takes advantage of crypto technologies’ advantages. This makes it possible for a brand-new and exciting industry to thrive and expand in safety, increasing investment and employment.

According to Andrew Griffith, Economic Secretary to the Treasury, they continue to be steadfast in their commitment to expanding the economy and facilitating technological change and innovation, which includes cryptoasset technology. However, they must also ensure robust, transparent, and fair standards to safeguard consumers who embrace this new technology.

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In accordance with its approach to traditional finance, the government will attempt to regulate a broad range of cryptoasset activities under plans announced on February 1, 2023.

Under these proposals, the detailed content requirements for admission and disclosure documents will be defined by crypto trading venues, ensuring that crypto exchanges have robust and fair standards.

The rules governing financial intermediaries and custodians, which are in charge of facilitating transactions and safely storing customer assets, will also be strengthened by the proposals. By taking these steps, we can create a robust, first-of-its-kind system that tightens regulations governing the lending of cryptoassets, protects consumers, and strengthens businesses’ operational resilience. By presenting a proposed crypto market abuse regime, the consultation will seek opinions on enhancing market integrity and consumer protection.