An amendment to the Financial Services and Markets Bill now before the UK Parliament would extend the powers of the law to regulate financial promotion and other activities to crypto assets. The amendment was drafted by Deputy Treasury Financial Secretary Andrew Griffith.
The 335-page bill was introduced in July and had its second reading in the House of Commons on September 7. According to the statement of reasons accompanying the amendment, it:
“[…] “[…] clarify that powers relating to financial promotion and regulated activities may be invoked to regulate crypto assets and activities related to crypto assets.”
The Financial Conduct Authority (FCA), the UK’s financial regulator, published a “Dear Chief Executive Officer” letter on August 9 detailing its strategy for overseeing so-called “alternatives portfolio” of financial firms. The letter said: “We will publish the final rules for the promotion of crypto assets once the Treasury formalizes the legislation to include them in our competition.”
Most cryptocurrency related companies in the UK are not currently under the control of the FCA, although they have the option of requesting registration and will be obliged to do so next year. Currently, the registration process only takes into account anti-money laundering and anti-terrorist financing measures, and has proven difficult for many applicants.
It was a pleasure to give evidence to the House of Commons Financial Services & Markets Bill Committee today, answering questions from @griffitha @TulipSiddiq and @MartinJDocherty on UK regulatory competitiveness, crypto-assets and stablecoin. More here: https://t.co/J0f1OCtqb5 pic.twitter.com/ZzjCwaPEiD
— Adam Jackson (@Adam_E_Jackson) October 19, 2022
The FCA also took action on the advertising of high-risk financial products in August, explicitly stating that crypto assets can be risky, but that the agency did not yet regulate them. The country’s Advertising Standards Authority has been more aggressive in monitoring cryptocurrency-related advertising.
Griffith’s predecessor as finance secretary, Richard Fuller, stated in September that the government was committed to making the UK a “hub for crypto technologies”. On Oct. 10, the European Parliament’s Economic and Monetary Affairs Committee approved the bill on crypto asset markets and a full parliamentary vote is expected shortly.
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