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The United Kingdom's financial regulator, the Financial Conduct Authority (FCA), aims to collaborate with crypto firms to establish a regulatory framework for the industry.
At London's City Week conference, FCA Executive Director Sarah Pritchard urged the industry to contribute to the development of regulations, stating that it is crucial to get the future regulatory regime for crypto assets right.
Pritchard acknowledged that crypto was once viewed as a symbol of alternative rebellion, but has now become more widespread. She also recognized that early engagement with industry players could lead to regulations that benefit everyone and allow firms to be prepared for changes.
Although the FCA's current responsibilities are limited to ensuring compliance with anti-money laundering and counter-terrorism financing legislation, Pritchard believes that regulations will be inevitable once the UK government legislates.
According to Pritchard, the FCA has supported 41 crypto companies of all sizes, but almost three-quarters of 195 overseas firm registrations were either rejected or withdrawn. Pritchard mentioned that the FCA will implement legislation governing crypto promotions and advertising high-risk investments, with heavy penalties for noncompliance.
Pritchard also highlighted the FCA's partnership with the government in developing proposals to regulate stablecoins, noting that the regulator has been pushing for the Financial Services and Markets Act to include crypto regulations since its amendment in October 2021.
In contrast to the US, where crypto industry insiders believe regulators are stifling the sector through enforcement actions instead of collaborating with industry leaders on meaningful regulations, the FCA's approach is more cooperative, seeking to engage with the industry to create effective regulations for the benefit of all stakeholders.