The cryptocurrency market experienced a serious meltdown in terms of exchange last year. This has caused millions of people around the world to suffer losses in terms of billions of dollars. Learn about the UK’s first regulation to set robust standards for digital assets.
The fight against money laundering
The crypto market is not yet regulated globally. Indeed, some companies are forced to go through controls to limit money laundering. However, the UK Financial Conduct Authority (FCA) maintains that more than 80% of license applicants cannot take on this task. In fact, the latter are not equipped with all the necessary tools to prevent the circulation of “black money”.
To do this, draft rules are to be published next Wednesday. This aims to ensure strong, fair and transparent standards. It should also be noted that this new legislation must be consistent with the traditional market approach. At least that’s what Financial Services Minister Andrew Griffith promised in a statement.
Why rely on new regulations?
Notwithstanding the volatility of some cryptos, enabling technological change and growing the economy is essential. To this end, it is important to think about fairly robust new laws. These are particularly relevant because the rise in interest rates is responsible for a series of bankruptcies observed last year. It was clear that the value of the crypto market lost at least $1.4 trillion.
Of course, this market rout led to a widespread loss of confidence in cryptocurrencies. This is why there will be a three-month public consultation before the adoption of the new “robust” plans. In addition, there is talk of relying on the FCA’s detailed rule suggestions.
The British Ministry of Finance therefore argues that this approach will mitigate the risks faced by the crypto sector in 2022. These are indeed proposals that aim to make crypto-trading platforms accountable.
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