UK proposes to bring crypto under regulatory eye

A proposed amendment to the UK’s Financial Services and Markets Bill would bring crypto under its purview.

The new clause, introduced on Friday by MP Andrew Griffith, is intended “to clarify that powers relating to financial promotion and regulated activities can be relied upon to regulate crypto-assets and activities relating to crypto-assets.”

The UK Treasury said in July that it would seek to regulate “certain types” of stablecoins as a form of payment following the collapse of Terra’s algorithmic stablecoin earlier this year. The country introduced the Financial Services and Markets Bill to Parliament that month.

Financial Markets Infrastructure Sandboxes, included in the proposed bill, would also be created in an effort to allow firms to test new technologies and practices.

The proposed change comes after Britain’s Financial Conduct Authority (FCA) finalized stronger rules in August to ensure firms marketing “high-risk investments” include better risk warnings.

The agency noted at the time that the regulations would not apply to crypto promotions until Parliament confirms via legislation how crypto marketing will be brought under the FCA’s mandate.

“These rules are likely to follow the same approach as for other high-risk investments,” the FCA said in its August statement. “Crypto is still high risk, so people must be prepared to lose all their money if they choose to invest in crypto assets.”

The European Union, which split from the UK when Brexit took effect in 2020, has similarly moved to regulate crypto, as lawmakers voted in favor of the EU’s Markets in Crypto Assets bill (MiCA) earlier this month.

MiCA, which is expected to come into force in 2024, is set to oversee all crypto-assets not regulated by existing financial services legislation.

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