As per recent media reports, the finance ministry of the United Kingdom is planning to unveil extensive cryptocurrency regulation.
The ministry, which is known as HM Treasury, is expected to publish draft rules for British crypto companies on Wednesday, February 1. According to statements from the Treasury and its financial services minister Andrew Griffith, these rules will be applied to crypto trading venues, which means the exchanges.
In addition, specific rules will also be applied to financial intermediaries and custodians. Sources reveal that the requirements will impose “fair and robust standards” requiring exchanges to define content requirements for admission and disclosure documents.
The term refers to a set of standards currently observed by companies seeking a listing on the London Stock Exchange but which could be adapted to crypto exchanges.
Following the release of the anticipated draft rules, the ministry will consult with the public for three months. It will then accept proposals for detailed regulations from the Financial Conduct Authority (FCA).
Sources cite that the news for the regulations followed the parliamentary debate from January 25, where Griffith led the conversation and lawmakers called for further regulation.
There have been media reports implying the upcoming rules were motivated by the collapse of the FTX exchange in November last year. However, the finance ministry has not explicitly expressed this notion in specified statements.
Despite the strict rules, Griffith has said that the nation is committed to economic growth, including crypto assets technology. Similarly, reports from January 11 stated that the UK should proceed with its plans to become a crypto hub.
However, the strict regulatory regime from the authorities seems to be valid as a joint investigation by the Bureau of Investigative Journalism and the Observer has uncovered that the country has become a hub for crypto and forex scams.
The investigation revealed that at least 168 companies were running fraudulent crypto or foreign exchange (forex) scams in the UK. The actual number might be much higher.
Not just that, Todayq News reported data from the United Kingdom police unit “Action Fraud” in November which revealed that crypto frauds in the country had risen by over 32% last year, taking the estimated value to 226 million pounds ($273 million).