UK working on regulating crypto market
2022.12.26 06:13
UK working on regulating crypto market
Budrigannews.com – In the United Kingdom, the failure of FTX is being viewed as a foreshadowing of more prudent regulation by public and private sector stakeholders.
In an interview with Sky News, Bank of England deputy governor Sir Jon Cunliffe made headlines ahead of the Christmas holiday by stating that investors in the United Kingdom seeking exposure to cryptocurrency markets require greater protection.
Cunliffe focused on that imminent digital money clients and financial backers ought to have a design to put resources into the resource class that guarantees comparable customer security and uprightness to customary monetary business sectors.
The deputy governor cited the growing interest in cryptocurrency markets from retail customers and financial institutions as the main reason for the country’s need for more regulation:
“We had banks and investment funds and others who wanted to invest in it and I think we should think about regulation before it becomes integrated with the financial system and before it becomes a systemic problem.”
Cunliffe also used the demise of FTX as an illustration of how the traditional finance sector’s regulatory framework may have protected users who had been left out of pocket.
“We saw things like clients’ money appears to have gone missing, conflicts of interest between different operations, transparency, audit and accounting.”
Cunliffe stated that investors should have access to a regulated environment that prevents investors from losing access to funds, as was the case in the collapse of FTX, drawing comparisons to the gambling industry in the United Kingdom.
Cointelegraph contacted Mitch Mechigian, a partner at investment firm Blockchain Coinvestors, to get more information about the UK’s current regulatory environment for the cryptocurrency and blockchain ecosystem. Mechigian, who is based in London, said that financial institutions and regulators still see value in blockchain technology and digital assets in a British economy after Brexit:
“British financial institutions and banks – many of whom already are investing heavily in blockchain technology – continue to want to participate in the digitalization of commerce, which starts with digital assets, monies and commodities.”
According to Mechigian, the demise of FTX exemplifies the significance of “prudent regulation.” He added that savvy regulators in the United States and the United Kingdom are clearly distinguishing between legitimate blockchain technology solutions that facilitate the digitalization of assets, money, and commerce and “offshore and fraudulent” businesses like FTX.
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In the United Kingdom, 2022 was a turbulent year for politics, with three different Prime Ministers taking office within a few months of each other. Mechigian stated that parliament continues to move toward passing the Financial Markets and Services bill, which would recognize cryptoassets as financial instruments, despite the “political economic chaos.”
