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UK Must Act Quickly to Ensure Fintech Lead, Encourage Crypto: Treasury Report Urges
The U.K. Treasury has released a report calling for a new regime for the regulation and administration of crypto assets.
An independent review initiated by U.K. Chancellor Rishi Sunak and led by Ron Kalifa shows the U.K. Treasury has set out a plan to retain what the report called the U.K.’s leadership position in fintech.
The report, titled the “Kalifa Review of U.K. Fintech” states the country has the potential to be the global center for the issuance, clearing, settlement, trading, and exchange of crypto and digital assets.
Kalifa highlights the European Union’s Markets in Crypto Assets (MiCA) proposal has been developing its propositions and the U.K. needs to “act quickly” to preserve and maintain its position as a hub for fintech firms.
“The U.K. should aim to be at least as broad in ambition as MiCA – but should also consider whether it can develop a bespoke regime that is more innovation-driven. A bespoke regime for crypto assets should adopt a functional and technology-neutral approach, in line with the principles of the current regulatory framework, as well as the concept of ‘same risk, same regulation’, while being tailored to the risks arising from crypto asset-related activities.” Kalifa Review of UK Fintech
There is the need to be “flexible” to deal with future challenges – such as how Decentralized Finance (DeFi) should be regulated, said the report.
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The review concludes the U.K. must continue participating in the international financial regulatory group, the Global Financial Innovation Network (GFIN), and lead the development of policy and regulation in the areas of crypto and digital assets.
Read more: UK Treasury Calls for Feedback on Approach to Cryptocurrency and Stablecoin Regulation
In January, the U.K. Treasury released a consultation paper to gather feedback from stakeholders concerning the government’s regulatory approach to cryptocurrencies and stablecoins. The responses to the consultation paper are being accepted until March 21.
SEC Inspectors Outline Crypto Examinations Playbook in Compliance Notice
Examiners at the U.S. government’s top securities watchdog outlined their framework for vetting digital asset investments in a compliance notice Friday.
Naming custody, record keeping, registration requirements and conflicts of interest protocols on their exhaustive list of focus areas, officials from the Securities and Exchange Commission’s (SEC) Division of Examinations reminded mainstream financial players like broker-dealers and investment advisors to tread carefully when bringing digital asset products into the traditional financial world.
The release, which did not appear to be targeted at any one event, nonetheless comes as ever more U.S. corporates grapple with how to handle their digital asset endeavors without stoking regulatory ire.
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On one end of this spectrum is MicroStrategy’s ban on employees trading bitcoin ahead of potentially market-moving corporate buys. And on the other is Tesla CEO Elon Musk, who yesterday expressed hope that rumors are true the SEC is investigating his DOGE tweets, which tend to precede with price jumps.
SEC examiners framed the notice as a reminder of the novel risks associated with distributed ledger technologies and digital assets, and of the responsibilities market participants have to hedge those risks with thorough compliance frameworks.