The U.K.’s Financial Conduct Authority (FCA) wants to work with crypto firms to shape regulation, Executive Director Sarah Pritchard said at City Week conference in London on Tuesday.
The U.K. has been looking to construct a new regime for “crypto – that one-time symbol of alternative rebellion – [that] has become more widespread,” Pritchard said. In February the U.K. government’s financial arm, the Treasury, launched a crypto consultation where it is seeking feedback from stakeholders on how to regulate the sector.
The FCA is one of the main crypto regulators in the country along with the Treasury, and it has been registering crypto firms to operate in the country. The consultation set out that the FCA may host a new authorization regime for crypto companies including overseas companies, which is “an unchartered territory” for them, Pritchard said. It is also planning on launching a promotions regime for digital assets as well.
“Let’s work together to shape our rules and regulations to benefit markets, consumers and firms as crypto goes from niche to mainstream,” Pritchard said. “Let us do it with our minds open to the potential gains and our eyes open to the risks.”
The FCA is known for being critical of the crypto sector, a stance not helped by the fact that crypto received by illicit addresses hit a record high of $20.6 billion last year, according to Chainalysis, or the collapse of the FTX exchange. The FCA has repeatedly warned consumers about crypto risks.
Out of the crypto applications the FCA got from firms looking to register with them 195 were either refused or withdrew, Pritchard said. Only 41 crypto firms have managed to register with the FCA.
However, the FCA has also started listening to the crypto industry at its engagement meetings with the industry, industry advocates have said.