Governments from all over the world are taking the initiative to regulate the cryptocurrency industry. Undoubtedly, the market has become exceedingly unstable as a result of the consecutive failures of crypto businesses this year. Regulators have voluntarily intervened as a result of clients losing billions. For instance, Australia’s crypto rules will probably get stricter in 2023.
Now, it appears that the UK may do the same. In a recent Financial Times article, Ashley Alder, the incoming chair of the Financial Conduct Authority, noted that when the agency obtains expanded regulatory authority over the industry, crypto firms intending to establish enterprises in the UK will face an uphill battle.
He stated,
“I think it [crypto] should be regulated further.”
Money Laundering Easier With Cryptocurrency Firms
Alder noted that in his opinion, cryptocurrency platforms were “deliberately elusive,” encouraged money laundering on a large scale, and produced “massively unfavorable risk” while speaking at a cross-party Treasury Select Committee.
Alder, the current Chief Executive of the Securities & Futures Commission in Hong Kong, further explained,
“Our experience to date of [crypto] platforms, whether FTX or others, is that they are deliberately evasive, they are a method by which money laundering happens in size.”
The way businesses in the sector “package a whole set of activities which are generally isolated… gives rise to substantially unfavorable risk,” he continued, including the possibility of conflicts of interest and improper asset management.
The FCA has struggled with its current burden, on the other hand. It is currently in the middle of a transformation program. MPs questioned Alder on why only a third of people trusted the FCA’s leadership. Alder responded,
“You could only hope that would improve.”
The new Chair also admitted that there were “perennial doubts about operational efficiency” and a view that the FCA had not “secured appropriate protection for consumers.” Alder declared that he intended to relocate to the UK in January. Notably, the following month, he will take over as FCA Chair.
The UK has stated that it will extend tax benefits for investment managers to cover crypto assets, therefore it is important to keep this in mind. The U.K. should function as a major worldwide hub for cryptocurrency, according to Prime Minister Rishi Sunak. The Treasury declared it will expand its current tax relief to the cryptocurrency sector.
The UK will provide tax benefits for investment managers that use cryptocurrency
The FCA, however, chose not to address whether or not its incoming Chair’s opinions differed from those of the administration.