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- 1 FCA Chief Executive asks for cooperation from the crypto industry to develop a regulatory framework.
- 2 The FCA received 195 applications for a U.K license in the last three quarters.
Robust and just crypto regulations would inevitably require cooperation from both the regulators and the industry. This amalgamation should create a win-win situation for both parties. Keeping this in mind, the U.K.’s financial regulator, the FCA, is asking for collaboration with the crypto industry to develop a regulatory framework.
‘Let’s Work Together – U.K. FCA
Executive Director of the Financial Conduct Authority (FCA), Sarah Pritchard, was speaking at the London City Week conference on April 25, 2023, where she emphasized the need for cooperation on crypto regulations. She asked for the industry’s input in ensuring that the agency correctly gets the future regulatory regime for crypto assets.
“Let’s work together, to shape our rules and regulations to benefit markets, consumers, and firms as crypto goes from niche to mainstream.” – Sarah Pritchard.
Arguing the benefits of such early engagements would benefit everyone associated with the industry. Their involvement would also prepare the industry to prepare itself when rules would come into effect.
There are severe dissimilarities between the approach taken to manage crypto by the U.K. and the U.S. The FCA is working towards collaboration which could be used in writing better regulations. Crypto entities operating in America have claimed that the local financial regulators are sabotaging the sector by enforcing actions.
Pritchard said that the FCA’s responsibilities, for now, are limited, as they have to ensure that all crypto firms operating in the United Kingdom must comply with Anti-Money Laundering (AML) laws and Counter-Terrorist Financing (CFT) legislation. She argued that the FCA would be more powerful after government legislation.
FCA executives said they received around 195 applications from overseas firms for licensing in the U.K. in the last three quarters. Out of these 41 crypto firms that have been registered, the remaining firms either withdrew their applications or were rejected for obtaining operating licenses in the U.K.
She hinted towards some changes that would occur when crypto legislations against crypto promotions and advertising high-risk investments will come into effect. Currently, there are heavy punishments for companies that breach the rules. But after its implementation, crypto firms could face up to 2 years in jail for breaching the U.K. advertising laws.
“This will come into our remit once the government legislates, and firms will have four months to implement changes.” – Pritchard.
The FCA is also working with the government regarding the regulation of stablecoins. Regulators are also trying to include crypto in the Financial Services and Markets Act, which was introduced in July 2022 and amended in October 2022.
Regulations formed by the cooperation between lawmakers and industry leaders are supposed to solve many problems. Moreover, this would generate trust among investors and companies and fuel crypto adoption. Such collaboration helps address multiple issues from both ends, and the results shall benefit all.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
