Regulating stablecoins was a concern that the bill addressed right away. If the revised draft is approved, the Financial Conduct Authority will now be able to control actions involving crypto assets.
The Financial Services and Markets Bill, which is currently before the UK parliament, would be amended to expand the law’s authority to regulate financial advertising and other activities to cover crypto assets. Andrew Griffith, a member of parliament and the Treasury’s financial secretary, drafted the amendment.
The 335-page bill was introduced in July, and on September 7, the House of Commons held its second reading. The accompanying explanatory statement for the amendment states that it would:
“[…] clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate cryptoassets and activities relating to cryptoassets.”
The UK’s financial watchdog, the Financial Conduct Authority (FCA), published a “Dear Chief Executive” letter on August 9 that outlined its approach to monitoring financial institutions’ so-called “alternatives portfolio.” The letter stated: “Once the Treasury formalizes legislation to bring these into our remit, we will publish final rules for the promotion of crypto assets.”
The majority of cryptocurrency-related businesses in the UK are not currently regulated by the FCA, though they do have the choice to do so and will be forced to do so in 2019. Many applicants have found the registration process to be difficult because it only considers anti-money laundering and countering the financing of terrorism measures for now.
While specifically stating that crypto assets can be harmful, the FCA did not yet regulate them when it initiated action in August against the advertising of high-risk financial products. The country’s Advertising Standards Authority has increased the vigilance with which it examines advertisements for cryptocurrencies.