An Amendment to the UK Financial Services Bill Regulates Crypto Activities
An amendment to the Financial Services and Markets Bill currently before the UK parliament would extend the powers of the law to regulate financial promotion and other activities to crypto assets. The amendment was drafted by MP and Financial Secretary to the Treasury Andrew Griffith.
The 335-page bill was tabled in July and passed its second reading in the House of Commons on September 7. According to the explanatory memorandum accompaniement the amendment would be:
“[…] Clarify that financial promotion and regulated activity powers can be used to regulate crypto-assets and crypto-asset-related activities.
The Financial Conduct Authority (FCA), the UK’s financial regulator, published a “Dear CEO” letter on August 9, which detailed his strategy for monitoring the so-called “alternative portfolio” of financial firms. The letter stated, “We will publish the final rules for the promotion of crypto assets once the Treasury formalizes the legislation to make them part of our mandate.”
Most Crypto Related Businesses in the UK are not under control from the FCA now, although they have the option of applying for registration and will have to do so next year. The registration process currently only covers anti-money laundering and anti-terrorist financing measures and turned out to be difficult for many applicants.
It was a pleasure to appear before the House of Commons Capital Services and Markets Bill Committee today, answering questions from @griffitha @TulipSiddiq and @MartinJDocherty on UK regulatory competitiveness, crypto-assets and stablecoins. More here: https://t.co/J0f1OCtqb5 pic.twitter.com/ZzjCwaPEiD
— Adam Jackson (@Adam_E_Jackson) October 19, 2022
FCA has also took action on advertising high-risk financial products in August and explicitly stated that crypto assets can be risky, but the agency does not yet regulate them. The National Advertising Standards Authority was more aggressive in monitoring crypto-related advertising.
Griffith’s predecessor as financial secretary, Richard Fuller, said in September that the government was committed to making the UK a “hub for cryptographic technologies”. On October 10, the Economic and Monetary Affairs Committee of the European Parliament passed the Crypto-Asset Markets Bill and a full parliamentary vote is expected soon.