Sarah Pritchard has spoken at the City Week conference on the risks of crypto and the extent to which regulation can help mitigate the risks. She noted that regulation cannot stop all risk. However, the UK regulators are taking action to amend the financial promotion regime to require crypto promotions to be treated like any other high-risk investment, and want to make sure they get the wider regulation of activities right.
She noted that, so far, FCA has registered 41 crypto firms under the MLRs, and is working towards getting its new powers to police financial promotions for crypto. FCA is waiting for the FSM Bill to get Royal Assent, and firms will have 4 months from the days the FCA rules that follow the new restrictions take effect to implement them.
She moved on to broader regulation and reminded delegates of the 30 April deadline to comment on the Government proposals. She warned that, even with regulation, crypto customers will not have the same protections as traditional investors and are most unlikely to be covered by FOS or FSCS.
She then talked about the importance of global coordination, Treasury’s proposals to regulate firms outside the UK who provide services into the UK, and the potential for future equivalence decisions when other countries develop their regulatory regimes further.
Finally, she called for industry input to help get regulation right – allied to the various industry events and the available sandboxes.