UK: Crypto Regulation Changes-Changes have been proposed on cryptocurrency regulation by the U.K Government as concerns persist about how crypto assets should be traded and used. This ‘Crypto Assets Taskforce’ comprises of the Bank of England (BOE) and the Financial Conduct Authority (FCA), and is responsible for regulating and supporting crypto technologies.

Cryptoassets

The taskforce has three types of Crypto assets:

The Taskforce’s cryptoassets framework. Source: U.K. Cryptoassets Taskforce

The Taskforce’s cryptoassets framework. Source: U.K. Cryptoassets Taskforce

According to the report, crypto assets should be utilized as a method for exchange. And should not be perceived as a cash currency. Due to their high instability, poor acknowledgment as methods for trade, and disappointment of utilization as a unit of record. In any case, the office makes it clear that the transfer of crypto assets can be more effective and less expensive exchanges.

As far as crypto assets are utilized with mere speculation. They can possibly broaden access to new venture openings. However, in the current market state, this is risky and may open shoppers to levels of dangers. And the incorporation of perils related to illegal movement.

Contracts Of Difference

UK: Crypto Regulation ChangesAccording to the report, cryptocurrency contracts for difference (CFDs) and futures can cause losses which are then further heightened by-product fees such as financing costs and spreads, and lack of transparency in the price establishment of the underlying crypto asset. The FCA, therefore, proposes the following prohibition:

“Given concerns identified around consumer protection and market integrity in these markets, the FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin (BTC), including CFDs, futures, options and transferable securities. The proposed prohibition would not cover derivatives referencing crypto assets that qualify as securities, however, CFDs on securities would remain subject to [the European Security and Market Authority’s] temporary restrictions and any future FCA proposals to implement permanent measures in relation to CFDs.”

Unless the FCA has confidence in the integrity of the underlying market and compliance with other regulatory criteria. It will not authorize the listing of transferable securities or a fund that references to exchange tokens

Taskforce

The Taskforce concludes that even though the situation may change in the future. Because for now, cryproassets pose a range of risks to consumers, market integrity. Which is due to manipulation, and other market-abuse issues.

While not wanting to disguise or diminish important cautionary statements, the agency proposes

 rules applying to regulated firms, which would give a “balanced impression” of the product or service.

They seem to be heeding the words from a joint report from the British Business Federation Authority (BBFA), venture capital fund Novum Insights, and cryptocurrency exchange TodaQ which urged caution about overly strict regulations in the U.K., saying that “bad regulation is worse than no regulation at all,” with the implication of knock-on effects for the wider U.K. fintech scene.

 

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