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A UK minister of parliament recently wrote to the Financial Conduct Authority (FCA) urging the regulator to take a softer line on crypto firms as they adjust to the new advertising rules.
Soften your approach
Andrew Griffith, Economic Secretary to the Treasury, has written to the FCA, urging it not to inflict harsh penalties on cryptocurrency companies that are still coming to grips with what they say is an extremely broad interpretation of the new advertising regulations.
Another point of contention according to Griffith is that the FCA has not yet published final guidance on what crypto companies should be doing in order to make sure that they stay compliant with the new rules.
FCA gave plenty of warnings
The FCA for its part has expressed some annoyance at the failure of certain cryptocurrency projects to get their house in order before the new regime came into effect, saying that all crypto companies that were operating in the UK had been warned by the regulator in plenty of time to make the necessary changes.
That being said, according to an article published in the UK’s Financial Times on Saturday, there is a growing frustration in some government circles that the FCA does not have the expertise and know-how with which to regulate such a complex sector as crypto.
On the one hand the government is publicly saying that it is very keen to make the UK a place that welcomes innovative companies from the crypto industry, and going so far as to state that it desires to become the foremost hub for crypto in Europe.
However, on the other hand, there are still those who are very entrenched in the legacy monetary system with much power and influence at the top of the Bank of England and the UK banks who would have crypto pushed out of the country or at least heavily regulated into the margins.
These new regulations are starting to have an impact, given that just on the first day of coming into force, the FCA published 146 alerts warning UK investors of various compliance issues among cryptocurrency projects.
Matthew Baker, partner at Brian Cave, quoted in the FT article, accused the UK government and its financial regulator of “pulling in opposite directions”, saying:
“Treasury and politicians jump up and down and make lots of noises about being financial centres and encouraging competition and the FCA is rightly or wrongly getting increasingly risk averse,”
UK could be abandoned
If the UK is to attract crypto companies to operate within its shores it must make sure that its financial watchdog is singing from the same hymn sheet. Failure to encourage this is likely to put crypto entities off from what is being seen by them as increasingly off-putting regulations.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.