UK crypto chiefs call for tighter regulation in wake of FTX collapse
Top crypto firms have called for tighter regulation of digital assets in the UK today as lawmakers look to safeguard investors in the wake of the collapse of the FTX exchange last week.
The industry has been left reeling from the collapse of the second largest global exchange, which rocked by a run on its assets and eventually folded amidst a liquidity crunch.
In a select committee hearing today, top crypto chiefs told MPs that centralised exchanges like FTX as well as the wider digital asset industry required closer regulatory oversight to shield investors from further collapses.
“We need regulation on certain centralised model participants. Perhaps if we’d had some regulation, some of these recent events may not have taken place where we’ve seen some pretty poor business practices,” Ian Taylor, executive director of industry body CryptoUK tols MPs.
The calls were echoed by the Tim Grant, EMEA chief of investment management firm Galaxy Digital, who said that “like any risk asset” crypto should be regulated and “some level of recourse should be in place”.
“But that’s going to be predicated on us having a regulatory regime that allows that to happen. Unfortunately, the moment that’s not strictly the case,” he added.
Crypto firms in the UK are currently only regulated under money laundering and financial promotion rules, restricting the amount of power regulators can wield over firms in the sector.
However, a new amendment to the Financial Services and Markets progressing through parliament is set to boost regulators’ powers to impose rules on cryptoassets and regulated activities surrounding crypto firms.
”This new clause amends the Financial Services and Markets Act 2000 to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate cryptoassets and activities relating to cryptoassets,” an amendment to the bill said.