New Regulation for Crypto Market
The UK government has announced plans to regulate the crypto market as part of a bid to protect consumers following the FTX scandal. Stricter rules will be implemented for crypto trading platforms and lending, focusing on the activity, rather than assets themselves. The regulation comes after a record £1.6 billion worth of cryptocurrency was stolen in hacks of services in the year to July 2022 as online criminals and nefarious state actors exploit vulnerabilities in decentralised finance. Andrew Griffith, Economic Secretary to the Treasury, said, ‘We must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards.’
Risks Highlighted by FTX Scandal
The FTX scandal has raised important questions around conflicts of interest, market conduct, and operational resilience. Mitigating these risks will require a combination of robust prudential safeguards, operational risk controls, transparency, and data reporting arrangements, measures to manage conflicts of interest, good governance, and adequate record keeping. It is hoped that the new legislation will allow the benefits of crypto technology to be realised in a secure, fair, and transparent manner.
UK Investors Exposed to Scams and Exchange Collapses
At present, there is no real regulation of the crypto industry in the UK, leaving investors exposed to scams and exchange collapses. Crypto fraud is on the increase with assets stolen through hacks or scams. Additionally, the collapse of exchanges such as FTX, along with serious allegations of misappropriation of funds, corruption, and lack of corporate governance have led to investor confidence being at a low point. The crypto sector desperately needs good news, and the Treasury’s announcement today that plans to regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance, is a welcome statement.
Read More Here https://www.standard.co.uk/business/uk-government-unveils-plans-to-regulate-cryptocurrencies-crypto-b1057099.html
