The collapse of the FTX crypto exchange encourages various parties in the crypto and government industry to design regulations against digital asset actors. Binance started with Proof of Reserve or proof of the company's reserves to the public which was then followed by a number of other crypto exchanges.
It doesn't stop there, the British government has also contributed to its role in cryptocurrency regulations by launching new regulations. According to a CNBC report, the main goal of this guideline is to curb the activities of crypto trading platforms and limit loans with high leverage on digital currencies.
The new regulations will also tighten reporting standards for crypto trading platforms and limit operational excesses. This is because volatility in the industry makes trading services very high risk and triggers the explosion of the FTX Derivative Exchange. This trading service is very high risk and can make Virtual Asset Service Providers (VASP) suffer losses.
Regulators in the UK will seek to ensure that the digital currency industry has the same standards as traditional financial players. Their main goal is to bring guide regulations in this industry to be more stable and secure for all parties.
"We remain steadfast in our commitment to developing the economy and enabling technological change and innovation, and this includes crypto asset technology," said Andrew Griffith, Finance Department's economic secretary.
"But we also have to protect consumers who use this new technology (with, ed.) ensure strong, transparent, and fair standards," Griffith added.
While there is some uncertainty about the number of FTX creditors from the UK, the fall of the exchange has created a sense of new urgency for regulators whose main goal now is to protect the integrity of their financial markets and consumer interests.
The proposed regulation for the crypto ecosystem in the UK will also include advertising these products to the public. Regulators want advertisements for crypto projects containing specific disclosures that will notify consumers of the risks inherent in the project.
According to Coinspeaker, although the UK government is serious about introducing this new rule, if it becomes law, it will take several years to complete and implement its provisions.
"Having a regulatory roadmap or regulatory travel direction will be very useful for the UK when it comes to becoming a crypto hub," said Julian Sawyer, CEO of the Standard Chartered-backed crypto-service company.
Several leading industrial leaders are now fighting for long-term regulations for digital currencies. The call from this stakeholder made the European Union pass the Crypto Asset Market Bill (MiCA) last year.
This is not only happening in the European Union, but regulators in the United States are also working to pass comprehensive multi-institutional regulations after the Executive Order was issued by President Joe Biden in March 2022. This indicates that the crypto industry has begun to obtain proper recognition from governments and regulators.
With better regulations, the crypto industry is expected to become more stable and transparent. This will help attract investors and facilitate the use of digital currencies in everyday life. Let's wait and see how this regulation will affect the crypto industry in the future.
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