The regulator aspires to enhance transparency by devising “consistent and transparent ‘rules of the game'” for crypto firms and consumers.
The Financial Conduct Authority (FCA) has published a discussion paper that is focused on the bolstering of regulations in the UK’s crypto-asset market. The paper aims to address what the FCA describes as a lack of transparency and exploitation.
In an effort to provide “precise and consistent ‘rules of the game’ for firms and consumers,” the regulator stated in a statement on Monday that it expects to enhance regulatory clarity.
The paper recommends that authorized crypto trading platforms implement robust internal controls to prevent market abuse and exchange information to identify fraudulent activity.
According to the FCA on Monday, “Admissions and disclosures, as well as market abuse frameworks, are essential for enhancing the integrity and purity of our crypto markets and enabling individuals to make well-informed financial decisions.”
The FCA stated that the establishment of a stable and dependable market framework will promote sustainable investment and long-term growth within the country’s borders.
The proposal drew on the government’s ongoing consultation with industry stakeholders, as well as insights obtained from crypto roundtables earlier this year.
The FCA said that crypto assets are still very risky and not well controlled. They warned, “If something goes wrong, you probably won’t be protected, and you should be ready to lose all your money.”
This initiative is the result of the FCA’s September disclosure that 90% of crypto firm applications were rejected last year as a result of inadequate anti-money laundering controls. In the same period, it also issued more than 450 consumer alerts regarding unauthorized crypto promotions.
In a similar vein, the Bank of England has heightened its scrutiny by mandating that firms disclose their crypto-asset exposures by March 2025.
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