As the price of Bitcoin and other crypto assets has taken a deep dive these past days the U.K. financial regulators have more time to implement new rules for the sector.
According to a Reuters report, the U.K. Financial Conduct Authority (FCA) has been pushed to hasten new regulation for the expanding crypto industry which increases the risk of a harsh position that could hamper both investment and development.
As Bitcoin’s value dropped under $4,500 on Tuesday and other crypto assets sharing the same faith, FCA representatives and government officials are determined to be more thorough in optimizing the new set of rules taking into account both financial innovation and investor protection.
British regulators are analyzing over 2,000 crypto assets
During a conference for crypto regulation that took place in London on November 20, deputy director for financial services at Britain’s finance ministry, Gillian Dorner, said:
“We want to take the time to look at that in a bit more depth and make sure we take a proportionate approach.”
At the conference, British regulators stated they are analyzing over 2,000 crypto assets to see if existing rules could help regulate them before considering reform.
FCA’s executive director for strategy and competition, Cristopher Woolard, declared the FCA is focused on establishing the contours of current and proposed regulation highlighting that the present situation still has many “grey edges”.
Woolard says that before 2018 ends, the FCA will consult to “clarify which cryptoassets fall within [its] existing regulatory perimeter and those cryptoassets that fall outside.”
He also mentioned that the FCA will collaborate with the U.K. finance ministry to determine if the perimeter is in need of “shifting”. Woolard recognized that national action is required but ultimately, the space can only be properly regulated with international cooperation.
During his speech at the conference, Woolard disclosed the FCA is considering a ban on crypto contracts-for-difference (CFDs) remarking concerns over retail customers being sold “complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”
At the end of October, the FCA released a statement in which it said it will initiate a consultation in the first quarter of 2019 regarding the possibility of banning the sale of crypto-based derivatives in the future.
For the time being, advising, trading, and transacting on crypto derivatives requires official authorization from the FCA as it falls under its regulatory jurisdiction.
Furthermore, last month, the U.K. government’s Cryptoassets Taskforce which includes representatives from the Bank of England, the FCA, and the U.K. Treasury published a report in which a new three-fold classification for crypto assets depending on their use has been proposed.