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After the rise in scams and crimes done using cryptocurrencies, the UK government has taken a crucial step towards its regulation
Under the Indian G20 Presidency, there has been an increase in worldwide efforts for more transparent policies regarding crypto assets. The aim is to guarantee the enforceability and predictability of rights, as well as to properly classify crypto. Amid a sharp rise in crimes and scams via crypto, the UK government has now taken a big step.
Crypto Needs Comprehensive Policies: IMF
The International Monetary Fund (IMF) highlights the need for robust regulation to cover all activities and entities related to crypto transfer, custody, issuance, or trading, including anti-money laundering, combating the financing of terrorism (AML/CFT), prudential, and conduct rules.
Moreover, additional requirements, such as the Principles for Financial Market Infrastructures, should be applied for systemic stablecoin arrangements. These are standards that ensure the safety, efficiency, and resilience of FMIs.
The Financial Stability Board (FSB) issued high-level recommendations for crypto regulations, focusing on financial stability. The recommendations include governance and risk management practices for providers and regulatory powers for authorities. Revised recommendations address risks associated with “global stablecoin” arrangements. The overall goal is to establish consistency in regulatory approaches to crypto.
New Laws of the UK Government
The UK government recently released Statutory Instrument documentation which states that law enforcement authorities will be able to freeze crypto assets used in crime without requiring a conviction from the end of April.
UK law enforcement authorities will be able to directly retrieve crypto assets from exchanges and custodian wallet providers. They will also have the option to destroy crypto assets if needed.
The passed legislation, reported by Cointelegraph in September 2022, aims to expand authorities’ ability to crack down on the use of crypto in crimes, such as cybercrime, scams, and drug trafficking. One of the provisions of the Economic Crime and Corporate Transparency Bill allows the recovery of crypto assets used in crimes without making an arrest first, as some individuals may avoid conviction by staying overseas.
Rising Crypto Scams
A British national who lost approximately $46,000 to scammers in a crypto fraud declared that UK authorities might be ill-equipped to handle crypto crimes against UK residents. He claimed that the agency failed to take appropriate measures to retrieve his stolen funds.
The UK government has recently stated its intention to pass new laws regulating stablecoins and crypto staking within the next six months. During a crypto event hosted by Coinbase in London on February 19, Economic Secretary to the Treasury Bim Afolami disclosed that the government is aiming to complete regulation before next year’s election, which is set to happen no later than January 28, 2025.
Summary
The Indian G20 Presidency has initiated efforts to increase transparency in crypto asset policies worldwide. The UK government has taken steps to allow law enforcement authorities to retrieve and even destroy crypto assets if necessary. Additionally, the UK plans to pass new laws regulating stablecoins and crypto staking in the next six months.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or any other related indexes comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
