Following the FTX crash, Britain announces steps to control the cryptocurrency business.

The U.K. publicly announced intentions to control the cryptocurrency market, with the aim of limiting some of the careless commercial activities that have developed over the last year and contributing to the collapse of FTX. The government put up a number of recommendations in a much-awaited industry discussion that was opened on Tuesday with the goal of bringing regulation of crypto asset companies into line with that of traditional banks. One of the ideas announced on Tuesday would make it more difficult for financial institutions and administrators to hold cryptocurrency on behalf of clients.

The rise of dangerous loans issued between various crypto businesses and the absence of due diligence on the counterparties in those deals were two major themes that developed in 2022. The U.K. According to a statement issued late Tuesday, plans would put a stop to such operations and aim to create a “robust world-first system reinforcing laws around the lending of cryptoassets, whilst enhancing consumer protection and the operational resilience of firms.”

According to a letter from Andrew Griffith, the Treasury's economic secretary, “We remain steadfast in our commitment to grow the economy and foster technological change and innovation, and this includes cryptoasset technology.”

“But we must also protect consumers who are embracing this new technology — ensuring robust, transparent, and fair standards.”

The efforts of international authorities to control the regulatory-averse crypto industry have become more urgent with the bankruptcy of FTX. To strengthen safeguards in cryptocurrency, both the European Union and the United States already have put up their own suggestions.

“Recent events in the crypto market reinforce the case for timely, clear, and effective regulation,” Griffith stated in a conference on December 2.

The collapse of FTX, which reportedly exploited customer funds to conduct dangerous loans and trades, triggered a series of bankruptcies for companies lending on digital assets that had access to the crypto powerhouse, notably BlockFi and the Genesis lending arm of Digital Currency Group. The measures published on Tuesday would also impose stricter openness regulations on cryptocurrency exchanges, requiring them to disclose pertinent disclosure papers and establish definite admittance standards for trading digital tokens.

Another plan would loosen stringent regulations on cryptocurrency advertising, enabling companies registered with the Financial Conduct Authority to run their own campaigns until the more comprehensive crypto framework is already being implemented. The enforcement action comes as cryptocurrency businesses in the U.K. and beyond are experiencing the frost of the “crypto winter” profound slump.

After the collapse of FTX and a drop in cryptocurrency prices, investors are slashing company values, and the sector has also been afflicted by multiple waves of layoffs. The London-based cryptocurrency exchange Luno downsized 35% of its staff last week, affecting roughly 330 positions. It requires awhile to regulate. Before the proposals are passed by Parliament, it will probably take several years. Parliament is still debating the Financial Services and Markets Bill, which would classify digital currency as a regulated good. The measure intends to increase the nation's financial industry's competitiveness after Brexit. However, some business leaders claim that even the most basic demonstration of taking any action is significant.

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