UK Government Set to Regulate Cryptocurrency; Says Treasury Minister
The UK Government has announced that it will regulate cryptocurrency to manage the numerous risks associated with the industry. This announcement is coming after the Treasury Minister estimated that up to 10% of UK adults now own some form of crypto.
According to the minister, the measures which will be captured in the regulation are aimed to “mitigate the most significant risks” of crypto technologies, while “harnessing their advantages”.
In 2022, the UK Prime Minister, Rishi Sunak, who was then Treasury Minister, said he wanted to make the UK “a global hub for crypto-asset technology.
The regulation proposal which was unveiled today was designed to address exigencies issues that might accompany cryptocurrency such as the collapse of FTX Exchange which hurt many cryptocurrency traders.
Investors King learnt that the regulation plans to oversee the entire crypto industry in the United Kingdom, with proposals on stronger rules for trading brokerage, crypto lending, and new token issues among others.
Meanwhile, the news of the potential regulation is perceived differently among the crypto community in the United Kingdom. While some welcomed the development as a step to corporate acceptance, others viewed it as a systematic crackdown on the crypto industry.
It would be recalled that the United Kingdom had ab initio maintained a mixed policy on cryptocurrency due to the high rate of fraud associated with it.
The UK government also created a dedicated crime unit for the crypto sector to track cryptocurrency-related fraud while the government also launched a massive crackdown on ‘misleading’ cryptocurrency ads.
In 2021, crypto ads flooded London’s underground rail network and buses amid the growing interest in bitcoin and other digital currencies.
However, with the potential introduction of the proposed regulation, the UK crypto industry will function alongside the traditional financial market. It will also enjoy more clarity, confidence and consumer protection.
It is believed that the regulation which will put cryptocurrency under the mainstream financial market will usher in a number of investors from the traditional market. Thereby, leading to more capital inflow.
Investors Withdraw 3,423 BTC from Binance Within 24 hours of CFTC lawsuit
Investors withdrew 3,423 bitcoins from Binance immediately after the United States Commodity Futures Trading Commission (CFTC) sued the crypto exchange and its CEO Changpeng “CZ” Zhao for regulatory violations.
This saw a reduction in Binance’s total Bitcoin balance while other exchanges registered an increase within the period.
Data from Coinglass shows that US-based crypto exchange, Coinbase, Bitfinex, OKX and Gemini saw a combined Bitcoin deposit of 1,032 as some investors worried about what may befall the Binance exchange.
Investors King understands that Monday’s bitcoin withdrawal on the Binance platform constitutes more than 90% of the total withdrawals in the past seven days. A total of 3,915 BTC were withdrawn from the Binance platform in the past week.
It would be recalled that the U.S. Commodity Futures Trading Commission (CFTC) alleged that the world’s biggest crypto exchange by trading volume is running unregistered securities and also tried to evade regulators by asking customers in the U.S. to use VPN.
Binance’s compliance programme has been “ineffective” and the firm, under the direction of Zhao, told employees and customers to circumvent compliance controls, the CFTC said.
Responding to the development in a series of tweets, Binance CEO Changpeng Zhao (CZ) who was born in China and moved to Canada at the age of 12, called CFTC’s complaint “unexpected and disappointing”.
“Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterisation of many of the issues alleged in the complaint,” the crypto billionaire said.
CZ however stated that the crypto exchange will collaborate with U.S. regulators to resolve all grey areas.
Meanwhile, some crypto enthusiasts have expressed huge concern with respect to the offensive launched against crypto firms in the U.S. They observed that the renewed offensive is coming amid the collapse of some big banks in the United States.
US Regulatory Body Sues Binance for Breaking Trading Rules
The world’s leading cryptocurrency exchange platform, Binance and its CEO Changpeng Zhao (CZ) were sued on Monday by the US Commodity Futures Trading Commission (CFTC).
The U.S. regulator alleged that Zhao and his company violated trading and derivatives rules.
According to a lawsuit filed by the CFTC in a Chicago federal court, Binance operates a facility for trading digital assets without necessary registration, thereby offering unregistered crypto derivatives products to consumers in the U.S. against federal law.
The suit also alleged that the company, under CZ’s leadership, directed its customers to spoof their locations through the use of virtual private networks (VPN), Investors King learnt.
“VPN use by customers to access and trade on the Binance platform has been an open secret, and Binance has consistently been aware of and encouraged the use of VPNs by U.S. customers,” the suit read.
“The company directed important customers such as trading firms to set up shell companies in places such as Jersey, the British Virgin Islands and the Netherlands to avoid restrictions”, the filing added.
In a press release on Monday, CFTC Chief Counsel Gretchen Lowe called Binance’s actions “willful evasion of U.S. law,” pointing to internal chats and emails.
Lowe is making reference to internal chats between Binance employees, where the company’s Chief Compliance Officer directed an employee to ask U.S. customers to hide their location.
As a penalty, the CFTC seeks to compel Binance to repay allegedly ill-gotten gains that stem from the misconduct it is accused of. It also wants Binance to pay civil penalties and accept bans on trading as well as its ability to register within the U.S.
Meanwhile, the price of bitcoin fell around $1,000 to trade below the $27,000 mark after the lawsuit was first filed. Similarly, Binance’s exchange token BNB fell about 3% while crypto-related stocks also fell after the suit was published.
Statista Predicts 150 Million Indians to Have Crypto By the End of 2023
A Statista report has predicted that India’s crypto community will surge to more than 150 million members by the end of the year. This was estimated at more than 11% of India’s total population.
The report added that most Indians who deal with digital assets are well-educated and aged between 18-40. Going by the report, by the end of 2023, India’s crypto adoption rate is expected to surpass that of the United States, the United Kingdom, Japan, and Russia.
Statista noted that educated younger individuals with middle-income status in India are seeking alternatives to the shaking banking system with residents of the Federal Capital, Delhi most inclined to buy and hold digital currencies for the long term.
The uncertainty in the traditional financial system and the search for higher returns are the main factors pushing Indians toward the digital asset sector.
Last year’s KuCoin survey indicated that the total number of domestic crypto investors in India is around 115 million, of which around 40% fall in the 18-30 age group.
Several reports have earlier projected more crypto adoption in the years ahead with countries in Europe, America, Asia and Africa leading the adoption chart. Investors King learnt.
According to HedgewithCrypto research, Australia is the biggest country when it comes to cryptocurrency adoption in 2023 as 7.37 out of 10 persons owned a digital currency. The sale of cryptocurrency and other digital assets is legal and regulated in Australia.
Other countries on the top ten list include the United States, Brazil, UAE, Hong Kong, Taiwan, India, Canada, Turkey and Singapore.
Meanwhile, a number of analysts have predicted that Bitcoin could begin a new macro uptrend in a matter of days despite facing problems flipping $28,000 to support.
Bitcoin has so far shown an impressive performance since the beginning of the year.
The flagship cryptocurrency is up more than 50% in 2023 despite the series of challenges that have impacted the banking system and the anti-crypto approaches from the US Securities and Exchange Commission.
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