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Government promises robust crypto regulation


Luna Ramsay

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The government is announcing measures to "robustly" regulate the cryptocurrency industry.

 

It says the proposals, being published on Wednesday, will give consumers confidence while allowing the sector to "thrive".

 

Critics say ministers should take a cautious approach, given the industry's prolonged global slump.

 

The crisis has seen companies collapse, crypto values tumble and customers lose huge sums of money.

 

The Treasury says its proposals - on which it is launching a consultation - will:

  • ensure customer assets are returned to them if a crypto business goes bust
  • lay down rules on crypto-asset promotions which are fair, clear and not misleading
  • enhance data-reporting requirements, including with regulators
  • implement new regulations to prevent so-called pump and dump, where an individual artificially inflates the value of a crypto asset before selling it

 

Ministers say the measures will "mitigate the most significant risks" of crypto technologies, while "harnessing their advantages".

 

Economic Secretary to the Treasury Andrew Griffith said the government remained "steadfast in our commitment to grow the economy and enable technological change and innovation - and this includes crypto-asset technology".

 

"But we must also protect consumers who are embracing this new technology - ensuring robust, transparent and fair standards," he added.

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Even when the crypto market was booming, in 2021, calls for regulation were loud.

After the chaos of 2022, the calls for order are now deafening.

Hundreds of billions of pounds were wiped from the crypto landscape and companies and people went bankrupt thanks to scandal after scandal.

The UK's plan to finally put concrete proposals in place will be welcomed by consumer investors hit in their pockets.

But I expect the consultation to be fiery, with many different groups wading into the debate about how to tame the wild beast of Bitcoin and other digital coins.

Part of the original appeal of cryptocurrency was its independence of traditional financial networks.

Moves to allow establishment control will infuriate a core group of true believers.

But with the right form of regulation, others will argue, the industry could truly blossom.

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