Binance, a top cryptocurrency exchange by trading volumes and client count, has praised the United Kingdom’s decision to consult as they look to establish a framework that will see cryptocurrencies better regulated, spurring adoption in the region.
HM Treasury Report ReleasedIn a tweet on February 1, following the United Kingdom’s HM Treasury sharing a report detailing the future financial services regime for crypto assets on the same day, Binance said they are welcoming steps taken by the government.
#Binance has vocally supported the need for effective and appropriate regulation to help with mainstream adoption of digital assets.
We welcome the next steps from the UK Government in making this happen with the @hmtreasury’s publication of plans to regulate crypto activities.
— Binance (@binance) February 1, 2023
The report sets out proposals for the United Kingdom’s financial services regime for crypto assets, including Bitcoin. It also highlights the risks and opportunities presented by cryptocurrencies. The report builds on previous HM Treasury proposals, which primarily focused on the role of stablecoins in crypto and the promotion of digital assets.
HM Treasury said the current proposals “marks the next stage of the UK’s phased approach,” and seek to make the region a leader in technology and innovation around digital assets. With proper regulations, HM Treasury believes providers will operate their businesses with certainty while also being in a better position to manage consumer and stability risks.
All consultative processes will close on April 23, 2023.
It should be noted that recent events, including the collapse of FTX, a cryptocurrency exchange, partly advised HM Treasury’s proposals.
In November 2022, the Bahamas-Based FTX filed for bankruptcy protection in the United States, taking billions of user funds with it. Sam Bankman-Fried, the former CEO, is under house arrest after posting a $250 million bond. His criminal case is ongoing in New York.
The fact that users, including those from the United Kingdom and the United States, lost funds in FTX could fast-track the development of laws around custody.
In the United Kingdom, the HM Treasury admits that there is “no regime for crypto-asset custody” and industry feedback has picked out different models used to custody digital assets. This state of regulatory affairs, they note, could cause harm to investors, especially if the custodian files for bankruptcy.
Binance believes a stable regulatory environment will spark innovation and create trust. These are the two ingredients that will foster long-term growth in the industry. Subsequently, the exchange is reviewing the details of the report’s consultation and is looking forward to contributing to the process.
In 2021, the United Kingdom’s watchdog, Financial Conduct Authority (FCA), banned Binance Markets Limited from undertaking any regulated activity in the region, citing weak measures to protect clients. The ban follows their withdrawal from registering with the FCA in May 2021, claiming they wouldn’t meet strict anti-money laundering requirements.
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