The UK has published its plans to regulate the cryptocurrency industry within the country.
The announcement points out that 'high levels of volatility and some recent failures have exposed the structural vulnerability of some of the industry's business models', all of which has led to a new set of regulatory guidelines.
Focusing specifically on trading and lending, the report describes how the UK government will 'seek to regulate a wide range of cryptoasset activity, consistent with its approach to mainstream finance'.
It describes how the proposals will place responsibility on cryptocurrency exchanges and companies to set detailed requirements for disclosure documents, ensuring 'fair' standards. In order to ensure the safety of customer funds, the consultation seeks to create a framework with clear guidelines for responsible practices.
The consultation also highlighted the need for cryptocurrency custodian actors and intermediaries to responsibly facilitate transactions and safely store customer assets. This is particularly important in light of recent events in the cryptocurrency space that have left millions of customers without access to their funds.
Today's consultation will conclude on 30 April 2023, after which the government will evaluate the feedback and issue a response. "Once the legislation is in place, the Financial Conduct Authority will consult on its detailed rules for the sector."
