UK Financial Watchdog to Crypto Industry: ‘Let’s work together’

The Financial Conduct Authority (FCA) of the United Kingdom intends to collaborate with cryptocurrency companies to create a regulatory framework for the industry. On April 25, FCA Executive Director Sarah Pritchard addressed the City Week conference in London, emphasizing the importance of collaboration on crypto rules.

“We want the industry’s input to make sure we get the future regulatory regime for crypto assets right,” she said. “Let us collaborate to shape our rules and regulations in order to benefit markets, consumers, and businesses as crypto moves from niche to mainstream.”

She described cryptocurrency as a “one-time symbol of alternative rebellion,” but admitted that it has “become more widespread.”

“Effective early engagement promotes regulations that benefit everyone and assists firms in being prepared when regulations go into effect,” she added. Pritchard mentioned the FCA’s warning to crypto investors a week before the FTX collapse in early November, but added that “we have always been open to innovation,” noting that “crypto assets and blockchain offers opportunities for more efficient and innovative financial services and products.”

The action contrasts sharply with the approach taken across the pond in the United States. Those in the American crypto industry believe that local financial regulators are attempting to crush the crypto sector through enforcement measures rather than crafting effective legislation in partnership with industry leaders.According to Pritchard, the FCA’s obligations are confined to ensuring that crypto businesses operating in the United Kingdom comply with anti-money laundering (AML) and counter-terrorism financing (CTF) legislation.

“Only when the government legislates will we have more powers to regulate crypto,” she adds. According to Pritchard, the FCA has backed crypto enterprises and registered 41 companies of various sizes; nevertheless, roughly three-quarters of the 195 total registrations from overseas corporations were refused or withdrawn.

Pritchard also stated that “tangible change” will occur in the shape of regulations governing cryptocurrency promotions and advertising high-risk investments. Companies that violate current advertising rules face severe penalties.

“This will fall under our purview once the government passes legislation, and firms will have four months to implement the changes,” she explained. “The rules will be published following the introduction of legislation.” According to Pritchard, the FCA has also been working closely with the government on its ideas to regulate stablecoins.

FCA officials advised the government in early March that crypto rules were unavoidable. The regulator is attempting to pass the Financial Services and Markets Act, which was introduced in July and revised in October to include cryptocurrency restrictions.