The UK financial regulator, the Financial Conduct Authority (FCA), wants to work with cryptocurrency companies to develop a regulatory framework for the sector.
On April 25, FCA chief executive Sarah Pritchard spoke at London’s City Week conference highlighting the need for cooperation on cryptocurrency regulation.
“We want input from the industry to make sure the future regulatory regime for crypto assets is the right one,” he said.
“Let’s work together to craft rules and regulations that benefit markets, consumers and businesses as cryptocurrencies move from niche to mainstream.”
He referred to cryptocurrencies as a “pointed symbol of alternative rebellion,” but acknowledged that it “has gone mainstream.”
“Effective early commitment supports win-win regulation and helps companies be prepared when regulation takes effect,” he added.
In her speech at #CityWeek2023Sarah Pritchard spoke about the regulation of #cryptocurrency and how effective early engagement can support regulation that benefits all. https://t.co/w6Zv6K5FP1
— Financial Conduct Authority (@TheFCA) April 25, 2023
In her speech at #CityWeek2023, Sarah Pritchard discussed cryptocurrency regulation and how effective early engagement can support win-win regulation.
Pritchard mentioned a warning issued by the FCA to crypto investors a week before FTX’s collapse in early November, but added: “we have always been open to innovation”, stating:
“Crypto assets and blockchain offer opportunities for more efficient and innovative financial services and products.”
This move is in stark contrast to the approach taken across the pond in the United States. Those who work in the cryptocurrency industry in the United States claim that local financial regulators are doing everything they can to kill off the cryptocurrency industry through enforcement action, rather than developing meaningful regulations in collaboration with industry leaders.
Pritchard noted that The FCA’s responsibilities are limited to making sure crypto businesses operating in the UK comply with Anti-Money Laundering (AML) and Anti-Terrorist Financing (CTF) legislation.
“Only when the government legislates will we have more powers to regulate cryptocurrencies,” he added.
According to Pritchard, the FCA has supported crypto companies and has registered 41 companies of all sizes.However, almost three-quarters of the total 195 foreign company registrations were rejected or withdrew their license applications in the UK.
Pritchard also mentioned that “tangible change” will come in the form of legislation for cryptocurrency promotions and high-risk investment advertising. The current advertising rules carry strong penalties for companies that break them.
“This will fall within our powers once the government legislates, and companies will have four months to apply the changes,” he said. “The rules will be published after the legislation is presented.”
The FCA has also been working closely with the government on its proposals to regulate stablecoins, Pritchard noted.
In early March, FCA officials told the government that cryptocurrency regulation was inevitable. The regulator is trying to move forward with the Financial Services and Markets Law, which was introduced in July and amended in October to include regulation of cryptocurrencies.
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