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LONDON (Reuters) – The UK Treasury on Wednesday released draft rules to regulate crypto assets, highlighting risks that need to be addressed due to ongoing turmoil in the sector and the collapse of exchange FTX. said.
Crypto-assets such as Bitcoin have little direct regulation globally, but regulators are taking a closer look after the collapse of FTX last year. This resulted in millions of investors losing billions of dollars in total. Part of it was in the UK.
In a proposal put forward for public consultation, Financial Services Minister Andrew Griffiths said: “We believe this will strengthen our argument for clear, effective and timely regulation and active engagement with the industry. I will.”
“This includes proposals to introduce a centralized cryptocurrency exchange into financial services regulation for the first time, as well as other core activities such as custody and lending,” added Griffiths.
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The new regulations cover entry into crypto-related trading platforms, public offerings, execution of payment transactions or remittances, arrangement of transactions, operation of the platform, custody, mining transactions, or operation of nodes on the blockchain.
Today, it is enough for cryptocurrency companies to demonstrate that they can comply with anti-money laundering safeguards.
Binance, the largest cryptocurrency exchange, said Wednesday that it welcomes public consultation, saying it is “vocally supportive of the need for effective and appropriate regulation to support the mainstream adoption of digital assets.”
Research shows that 5-10% of adults in the UK own crypto assets, an increase of over 100% in the past year or two, and institutional investor participation is on the rise.
The sector has shrunk dramatically over the last year, with total global market capitalization dropping from a peak of around $3 trillion to below $1 trillion.
The UK had already started talks in January 2021 on regulating stablecoins, a subset of crypto assets backed by currencies and other assets, but plans to expand them to include all crypto sectors. decided.
After three months of consultation, secondary legislation is expected later this year with detailed rule proposals for public consultation from the Financial Conduct Authority.
Reported by Hugh Jones.Editing by Jason Neely and Sharon Singleton
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