The government has laid out plans to regulate crypto assets as it seeks to provide confidence and clarity to both consumers and businesses.
The plans revealed yesterday (January 31) will seek to regulate a broad set of crypto-asset activities in line with other regulated financial markets.
Under the proposals, crypto trading platforms will be responsible for defining detailed content requirements for admission and disclosure documents.
The proposals will also strengthen rules on financial intermediaries and custodians who have responsibility for facilitating transactions and safely storing client assets.
According to the government, these steps will help deliver a robust, world-first regime that tightens the rules around crypto asset lending.
The proposals focus on a number of important crypto-asset activities, including trading, custody, and lending.
For each activity, the consultation sets out key regime design features covering topics such as prudential requirements, data reporting, consumer protection, location policy, and operational resilience.
The consultation paper also proposes regimes for a variety of cross-cutting issues that apply to crypto asset activities and business models, including market abuse and crypto asset issuance and disclosure.
Treasury Economic Secretary Andrew Griffith said: โWe remain steadfast in our commitment to grow the economy and enable technological change and innovation, and this includes crypto-asset technology.
โBut we must also protect consumers who are embracing this new technology by ensuring robust, transparent and fair standards.โ
The inquiry builds on previous Treasury proposals that focused on stablecoins and the financial promotion of crypto assets.
The two-month consultation, on improving crypto market integrity and consumer protection, will close on April 30.
The government will consider the comments and work to establish its response to the inquiry.
The Financial Conduct Authority will consult on its detailed rules for the crypto sector after the required legislation has been enacted.
Treasury is also introducing a time-limited exemption for FCA-licensed crypto asset companies to issue their own promotions while the broader crypto asset regulatory regime is created.
