The UK to Enforce ‘Robust’ Standards in the Crypto Industry After FTX Crash

The government of the United Kingdom is willing to strengthen the rules on the local cryptocurrency sector to prevent another adverse event like the FTX collapse.

The recently-appointed Prime Minister – Rishi Sunak – is known as an advocate of blockchain technology, arguing the country should emerge as “a global cryptoasset technology hub.”

People’s Protection is Most Important

Andrew Griffith – Economic Secretary to the Treasury – revealed the government’s intentions to design a regulatory framework for the domestic cryptocurrency industry that will not cease technological development. The main goal will be to ensure maximum security for consumers when dealing with bitcoin and alternative coins:

“We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology. But we must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards.”

Griffith previously argued that the UK must improve customer protection in crypto to avoid another disaster in the industry like the crash of FTX. The implosion caused a massive market decline, significant investor losses, and undermined the reputation of the entire sector.

In addition, it triggered a domino effect which saw many other players experiencing liquidity problems or even declaring bankruptcy. The once-prominent BlockFi and Genesis are some examples.

The rules, proposed by the British authorities, will require digital asset firms to publish document disclosures to clients. They will also offer relaxed regulation on crypto advertisements, enabling entities registered with the Financial Conduct Authority to launch marketing campaigns.

The upcoming regulation, though, could take a few years before Parliament officially approves it.

Rishi Sunak’s Ambitions

The former Chancellor of the Exchequer of the United Kingdom – Rishi Sunak – became Prime Minister of the UK in October last year. His appointment seemed like good news for British crypto participants since he has presented himself as a proponent of the sector.

“We’re working to make the UK a global cryptoassets hub. We want to see the businesses of tomorrow, and the jobs they create, here in the UK,” he said back in April 2022.

He also asked the Royal Mint to create a non-fungible token (NFT) collection. The assets were supposed to be ready last summer. 

Julian Sawyer – CEO of Zodia Custody – believes the regulatory roadmap outlined by Sunak’s cabinet could be “super useful” for the UK in terms of becoming a crypto hub.