The UK government (finally) unveiled its plans to regulate the crypto industry.
The proposals take aim at risky lending practices that exacerbated the industry's woes in the past year - incl. the demise of FTX.
Here's a rundown of what's been announced and why it matters 🧵
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First up, 🇬🇧 is going to crack down on centralised crypto lending.
Treasury has committed to a "world-leading" framework that brings standards for crypto lenders closer to that of traditional finance.
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That puts it a step ahead of EU/US, who've not specifically covered crypto lending yet.
It could (and that is "could" for now as details are thin) prevent another crypto lending biz from becoming all-out disaster. 💣
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These crypto lending business models were severely tested by the plunge in token prices last year 📉
Coins users and companies posted as collateral plummetted in value, meaning that when people actually wanted their money back, they didn't have the funds to complete withdrawals.
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More generally, the govt says it wants consumers protected.
Many mention FTX in talk of consumer crypto losses. But it's not the only firm to have failed.
Celsius, BlockFi, Voyager, Genesis... all notable examples of crypto lenders that went bust, erasing billions 💸
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Another thing the UK plans to do is relax previously proposed curbs on crypto ads.
Industry insiders tell me current thinking from the regulator would mean a de facto ban on virtually all crypto ads. 🚫
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Worth noting that, though FTX has added urgency to global regulatory efforts, the UK's open attitude to crypto isn't entirely new.
I first reported on the Treasury's plans to make Britain a global "crypto hub" in March 2022.
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Safe to say that the fall of Terra/Celsius/FTX + chaotic revolving door of PMs has pushed the timing back somewhat!
More on that in our video on the fall of FTX 👇
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The collapse of FTX shook crypto to its core. Investors lost huge sums. Companies revealed exposure.
Now, everyone is trying to guess how far the contagion will spread.
In our latest digital video, we explain what went wrong with FTX and what it means for other exchanges.
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18.7K views
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Separate thing to note: the UK may have finally laid out a path to regulate crypto, but it's going to take time before the rules eventually enter into force.
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Still though, the simple fact that the country is seen doing something is enough for some industry insiders.
“Having a regulatory roadmap or regulatory direction of travel is going to be super useful for the UK in terms of being a crypto hub,” told me.
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For more on the UK's big crypto regulation push, check out my writeup for CNBC:
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