Amendment to UK Financial Services Act provides regulation for crypto activities
An amendment to the Financial Services and Markets Bill now before the UK Parliament would extend the law’s powers to regulate financial promotion and other activities of crypto-assets. The amendment was written by MP and Financial Secretary to the Treasury Andrew Griffith.
The 335-page bill was introduced in July and had its second reading in the House of Commons on 7 September. According to the reasoning that accompanied the amendment, it would:
“[…] clarify that financial promotion and regulated business powers can be relied upon to regulate cryptoassets and activities related to cryptoassets.”
The Financial Conduct Authority (FCA), the UK’s financial regulator, published a “Dear Chief Executive” letter on August 9, detailing its supervisory strategy over the financial institutions’ so-called “alternative portfolio.” The letter said: “We will publish final rules for the promotion of cryptoassets once the Treasury formalizes legislation to bring these into our remit.”
Related: FCA green-lights Revolut, leaving no UK crypto firms operating under interim status
Most crypto-related businesses in the UK are not under the control of the FCA now, although they have the option to apply for registration and will be required to do so next year. The registration process currently only looks at Anti-money laundering and counter-financing of terrorism measures and has proved challenging for many applicants.
It was a pleasure to give evidence to the House of Commons Financial Services & Markets Bill Committee today, answering questions from @griffitha @TulipSiddiq and @MartinJDocherty on UK regulatory competitiveness, cryptoassets and stablecoins. More here: pic.twitter.com/ZzjCwaPEiD
— Adam Jackson (@Adam_E_Jackson) 19 October 2022
The FCA also cracked down on the advertising of high-risk financial products in August, explicitly stating that crypto-assets can be risky, but the agency did not yet regulate them. The country’s Advertising Standards Authority has been more aggressive in monitoring crypto-related advertising.
Griffith’s predecessor as Chancellor of the Exchequer Richard Fuller stated in September that the government was committed to making the UK a “hub for crypto technologies.” On October 10, the European Parliament’s Economic and Monetary Affairs Committee adopted the Markets in Crypto-Assets bill, and a full parliamentary vote is expected soon.
