Crypto Crackdown. Prime Minister Keir Starmer has started to designate members to the new government following the recent landslide election, in which the UK Labour Party won. Legislator Tulip Siddiq, also the City Minister and Economic Secretary to the Treasury, is one of the new appointees.
Siddiq will now be in a position to shape UK policy on the regulation of digital assets and digital currencies issued by central banks thanks to his appointment. Nevertheless, her earlier remarks about a possible “crypto crackdown” have generated interest.
Siddiq Calls for Framework to Address Crypto Risks
To address the risks and opportunities presented by crypto assets, Siddiq advocated for a “comprehensive, all-of-government framework” in an op-ed published in the New Statesman in May 2023.
She said the Conservative government’s stance on Bitcoin was like the “Wild West,” and she pushed for more regulation and laws to prevent fraud. According to Siddiq, a Labour government would prioritize luring financial technology (fintech) firms to the UK and regulating the industry appropriately.
Siddiq is well-known in the Bitcoin business for her position on the subject. By 2022, the self-regulatory trade group CryptoUK had named her one of the top ten UK parliamentarians debating blockchain and cryptocurrency in the House of Commons.
According to financial consultant Nigel Green of deVere Group, if Labour were to become the next government, Siddiq would turn the United Kingdom into a world hub for tokenized assets. However, the Labour government’s intentions regarding digital assets are unclear. Putting an end to the Conservatives’ plan to send asylum seekers to Rwanda seems to be the primary objective at the outset.
Some analysts believe Web3 regulatory infrastructure development may be pushed aside in favor of housing and the National Health Service (NHS). Edouard Hindi, chief investment officer of hedge fund Tyr Capital, believes the incoming UK government should determine the country’s crypto policy before proceeding with Web3 regulation.
In particular, the UK economy is struggling with issues including unemployment, slow economic development, and inflation. As of April 2024, the UK’s inflation rate was very high due to factors such as increasing energy prices and disruptions in the supply chain.
UK Increases Regulatory Scrutiny
Following several high-profile bankruptcies last year, the United Kingdom joined other nations in strengthening regulatory efforts. The Financial Conduct Authority (FCA) is in charge of anti-money laundering and consumer protection regulations regarding cryptocurrency.
The Financial Conduct Authority (FCA) introduced new regulations last year that require cryptocurrency businesses to register and have their marketing materials approved by a firm recognized by the FCA. One important development is that exchanges are now explicitly alerting their users about the dangers of investing in cryptocurrency.
The Financial Conduct Authority (FCA) has warned that domestic and foreign exchanges operating in the UK face criminal prosecution, including the possibility of two years in prison and limitless fines for noncompliance. Consequently, prominent cryptocurrency exchanges like Binance, Coinbase, and Revolut have upgraded their web and mobile apps to comply with the new rules.