• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer
  • Subscribe
  • Twitter
  • RSS Feed

Investment News NZ

Investment News provides financial advisers news stories from the financial industry in New Zealand. Subscribe to our free weekly newsletter.

  • Home
  • News
  • Kiwisaver
  • Subscribe
  • About
  • Advertise
  • Contact
You are here: Home / Investment News / Crypto damage controls up for review in UK

Crypto damage controls up for review in UK

December 2, 2018

Chris Woolard: FCA head of strategy and competition

UK regulators are weighing up a range of a measures to rein in potential risks posed by ‘cryptoassets’.

Christopher Woolard, Financial Conduct Authority (FCA) executive director of strategy and competition, told a UK symposium that government agencies were mulling new control settings in the wake of a report on the cryptoasset sector.

Woolard said the UK Treasury, FCA and the Bank of England cryptoasset taskforce report published at the end of October “concluded that there are three major harms” linked to the sector.

“The first harm is to consumers, who may buy unsuitable products, face large losses, be exposed to fraudulent activity, struggle to access market services, or be exposed to the failings of service providers, such as exchanges,” he said in the speech. “Then there’s potential harm to market integrity. Opaque practices and misconduct could damage confidence in wider market functioning.

“And of course, we cannot overlook the risk of financial crime, where cryptoassets have been used as part of illicit activity such as money laundering and fraud.”

The joint government regulatory taskforce lumped cryptoassets into three categories: ‘exchange tokens’ such as bitcoin; ‘security tokens’ used in ‘initial coin offerings’ and the like; and, ‘utility tokens’ that can be “redeemed for access to a specific product or service” via a blockchain service.

“We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues,” Woolard said. “Given this, the FCA will also consult on a prohibition of the sale to retail consumers of derivatives referencing certain types of cryptoassets (for example, exchange tokens), including contracts-for-difference, options, futures and transferable securities.”

He said the UK financial regulator would also consult by the end of this year on “perimeter guidance” to determine which cryptoassets fall inside the current regime.

“Treasury is to then consult on whether the regulatory perimeter requires an extension to capture cryptoassets that have comparable features to specified investments, but currently fall outside the perimeter,” Woolard said.

Furthermore, the Treasury planned to “consult and legislate” on extending the UK anti-money laundering rules to cover the cryptoasset market.

“Finally, the Taskforce has also concluded that exchange tokens present new challenges to traditional forms of financial regulation,” Woolard said. “The Treasury, therefore, plan to complete further analysis on whether regulation could meaningfully and effectively address the risks posed by exchange tokens and what, if any, regulatory tools would be most appropriate.”

He said the consultation would begin early next year “on whether and how exchange tokens, as well as related actors such as exchanges and wallet providers, could be regulated effectively”.

“However, we also recognise the limits of domestic action on this global, cross-border issue,” Woolard said. “We will, therefore, also seek to work collaboratively with international counterparts, including standard-setters and other national jurisdictions.”

About half of the current batch of firms playing in the FCA’s ‘Regulatory Sandbox’ were using some form of distributed ledger technology (also known as blockchain) or cryptoasset to build their products.

“Given that both UK firms and consumers are likely to experiment with current and future generations of cryptoassets, it’s vital we head off risks,” Woolard said.

Last year the Financial Markets Authority (FMA) concluded that most cryptoassets would likely fall under its purview.

An FMA guide issued at the time says: “As this sector develops, we will continue to monitor and consider what additional regulatory support and requirements may be appropriate for the offer of these products and services.”

 

Print Friendly, PDF & Email
Twitter0
LinkedIn0
Google+0
Facebook0

Read More » Investment News

Recent articles

  • Chief exits Kiwi Wealth; Mosaic names ASB ops expert as partner; T Rowe Price keeps Australasia wholesale role in the family February 28, 2021
  • Revenge against the ombudspeople: complaints body zombie legal action walks on February 28, 2021
  • Simplicity into top 10 ESG fund share for Australasia… February 28, 2021
  • … as Milford, Hyperion top Morningstar awards February 28, 2021
  • Tough calls ahead for local fixed income managers February 28, 2021
  • Boutique buoyancy management: how Ark stays afloat with more on board February 28, 2021
  • Master trusts surpass $8bn ahead of AMP passive rebirth February 28, 2021
  • T+1 and counting: why US trading systems could reach unsettling speeds February 28, 2021
  • Nature calls: under-construction financial disclosure framework to go beyond climate February 28, 2021
Finished reading? Why not subscribe? To receive a weekly email enter your email address here.

Primary Sidebar

WEEKLY NEWSLETTER

Sign up here to receive our weekly newsletter.
Learn More »

Investment News

  • Chief exits Kiwi Wealth; Mosaic names ASB ops expert as partner; T Rowe Price keeps Australasia wholesale role in the family February 28, 2021
  • Revenge against the ombudspeople: complaints body zombie legal action walks on February 28, 2021
  • Simplicity into top 10 ESG fund share for Australasia… February 28, 2021
  • … as Milford, Hyperion top Morningstar awards February 28, 2021
  • Tough calls ahead for local fixed income managers February 28, 2021
  • Boutique buoyancy management: how Ark stays afloat with more on board February 28, 2021
  • Master trusts surpass $8bn ahead of AMP passive rebirth February 28, 2021
  • T+1 and counting: why US trading systems could reach unsettling speeds February 28, 2021
  • Nature calls: under-construction financial disclosure framework to go beyond climate February 28, 2021
  • Front-to-back outsourcing transforms funds management February 28, 2021

Search by Keyword

Most Recent Investment News

Chief exits Kiwi Wealth; Mosaic names ASB ops expert as partner; T Rowe Price keeps Australasia wholesale role in the family

February 28, 2021

Revenge against the ombudspeople: complaints body zombie legal action walks on

February 28, 2021

Simplicity into top 10 ESG fund share for Australasia…

February 28, 2021

… as Milford, Hyperion top Morningstar awards

February 28, 2021

Tough calls ahead for local fixed income managers

February 28, 2021

Investment News Archive

Most Popular Articles

  • NZ share-trading splurge could trigger tax alarms… posted on October 5, 2020
  • Westpac NZ flags retail advice sale to Forsyth Barr posted on October 19, 2020
  • Flint set to spark platform competition posted on August 17, 2020
  • The horror year in technicolour: free KiwiSaver 13 report released posted on September 30, 2020
  • Four to the core: Smartshares to expand, rearrange and reprice ETFs posted on June 22, 2020
  • Kitset KiwiSaver scheme set to unwrap in spring posted on April 27, 2020
  • Funds eye bargains, self-shoppers hoard cash, KiwiSavers turn conservative posted on March 15, 2020
  • NZ Funds directors back on board posted on April 24, 2016

Sponosored Content

David-Boyle

Jumping lessons: what all investors can learn from GameStop loss

What do ‘Kiwi’ experts see for 2021?

David-Boyle

On the industry play-list: four chart-topping regulations for 2021

David-Boyle

Charge of the lite (advice) brigade

Quick-links to Popular News

  • FAP Compliance
  • Coronavirus
  • New Appointments
  • Financial Markets Authority (FMA)
  • Kiwisaver
  • Climate Change
  • Crypto Currency
  • Blockchain
  • Insurance

Secondary Sidebar

Recent News

  • Chief exits Kiwi Wealth; Mosaic names ASB ops expert as partner; T Rowe Price keeps Australasia wholesale role in the family February 28, 2021
  • Revenge against the ombudspeople: complaints body zombie legal action walks on February 28, 2021
  • Simplicity into top 10 ESG fund share for Australasia… February 28, 2021
  • … as Milford, Hyperion top Morningstar awards February 28, 2021
  • Tough calls ahead for local fixed income managers February 28, 2021
  • Boutique buoyancy management: how Ark stays afloat with more on board February 28, 2021
  • Master trusts surpass $8bn ahead of AMP passive rebirth February 28, 2021
  • T+1 and counting: why US trading systems could reach unsettling speeds February 28, 2021
  • Nature calls: under-construction financial disclosure framework to go beyond climate February 28, 2021
  • Front-to-back outsourcing transforms funds management February 28, 2021

Footer

Copyright ©2020 InvestmentNews.co.nz — All Rights Reserved ·— Terms & Conditions