LONDON —Tough rules are needed to “detoxify” crypto to remove conflicts of interest, safeguard customer assets and force through radical changes to business models, Britain’s financial watchdog is saying.
The Financial Conduct Authority’s new chair Ashley Alder said rules for crypto should be just as tough as for risky activities in mainstream finance. Britain plans to regulate crypto under a new financial services law this year, Reuters reported.
A regulatory regime the same as for conventional finance would see crypto business models change radically, Alder said.
“One of the questions in my mind is when you put in place a regulatory framework around crypto, the interesting aspect is the degree to which crypto will need to adapt and effectively detoxify to fit into that regime,” he added.
More Than Half Apply
Some 85% of crypto firms who applied for permission to operate in Britain were rejected by the FCA because they could not comply with basic anti-money laundering safeguards, Reuters noted.
Some firms in the sector were evasive, with near deliberate multiple conflicts of interest and huge issues around proper safeguarding of customer assets, Alder told parliament’s Treasury Select Committee.
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