- British government stands for crating regulatory environment for cryptocurrency assets.
- The FCA may have its powers expanded.
The UK financial watchdog may receive a green light for regulating cryptocurrency industry as the government stands ready to provide the Financial Conduct Authority (FCA) with essential powers, the Financial Times reports.
Currently, FCA regulates cryptocurrency assets that act like securities, but significant pool assets remain in the grey area, creating a “Wild West” market. According to parliamentarians, high volatility and vulnerability to manipulations and hack attacks make this market segment risky for consumers.
With that in mind, the Treasury is going to launch consultations to decide the scope of cryptocurrency market regulation.
“The Government will consult early next year to explore whether other cryptoassets, that have comparable features to specified investments but that fall outside the current perimeter, should be captured in regulation.
“Subject to the outcome of this consultation, the Government stands ready to legislate to expand the regulatory perimeter to ensure that FCA regulation can be applied to all cryptoassets that have comparable features to security tokens, regardless of the way they are structured,” John Glen, the City minister, commented.
In September the Treasury select committee published a report, citing concerns related to investor protection and money-laundering on the cryptocurrency market. This report urged the politicians to take steps towards tighter industry regulation.
In October, the Financial Conduct Authority said that it contemplated a ban on crypto derivatives. Apart from that, the regulator plans to launch consultations on cryptocurrency market and trading infrastructure, including crypto exchanges and wallet service providers.
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