New Crypto Regulations Coming to the U.K.

This week the U.K. government published its response to a consultation paper from earlier in the year, which outlined recommendations on regulating the crypto industry.

In the paper, regulators state that the intention is to bring crypto asset activities under the same regulations that govern banks and other financial services in the U.K.

“I am very pleased to present these final proposals for crypto asset regulation in the UK on behalf of the Government,” Andrew Griffith, the U.K. financial services minister, said in a statement.

“I look forward to our continued work with the sector in making our vision a reality for the UK as a global hub for crypto asset technology.”

Once the new rules are in place, the U.K. will be much further ahead in adopting new frameworks for crypto, especially when compared to the U.S. Numerous bills are going through Congress, but the U.S. is far behind others when it comes to bringing about formal federal laws for the crypto industry.

Industry Support for the new Regulations

London-based Oliver Linch, the CEO of Bittrex Global, was positive on the new paper and the proposed regulations.

“This is a step in the right direction,” he explained. “It’s the UK’s first significant move towards treating crypto as a grown-up asset class in serving the needs of both institutional and retail investors, albeit one that has garnered a somewhat lukewarm response thus far. While the reception thus far from within the crypto community has been muted, I think that’s unfair. People seem to be disappointed that the UK will not be adopting a big, showcase, stand-alone regulation like MiCA (in the EU), or the VARA Regulations (in Dubai), preferring instead to regulate crypto under existing market legislation. But there are many ways to skin a cat, and I’m more interested in substance than style. The UK’s proposed approach can certainly be made to work and realistically was always the most likely route. There is a lot to be optimistic about here too.”

_Oliver Linch_

U.K. Prime Minister Rishi Sunak has championed the UK as a potential global crypto hub but faces tensions with the Financial Conduct Authority as the regulator looks to increase safeguards for consumers. The new rules appear intended to appease both camps.

Lunch added, “There is an important message being sent about the way the UK sees the likely development of crypto and its relationship to the wider financial services sector. By including crypto in the general financial services legislative framework, the UK government is signaling that it agrees with Bittrex Global’s view that the future of crypto is simply another part of the financial sector; this is an important first step in crypto taking its rightful place at the adult’s table. We must all remember that the real goal is not to ‘beat’ the EU, Dubai, or elsewhere, but to provide a path for citizens to access the benefits of digital assets while ensuring that they are afforded the proper protections. There is much in the government’s response that suggests that this will be achieved in the UK, bringing the certainty that institutional investors and corporates will need to set up shop or relocate their operations, priming the UK to fulfil its ambition of becoming a much sought-after ‘crypto hub’. Let’s see!”

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