UK Gov't Unveils Crypto Rules to Combat Scams

The UK Treasury and Chancellor of the Exchequer, Rachel Reeves, have suggested new cryptocurrency regulations designed to "foster innovation while combating scammers."

In an announcement dated April 29, the British government announced Draft regulations for digital currencies such as Bitcoin, including BTC ) and Ether ( ETH ), which would align "cryptocurrency exchanges, dealers, and agents" with regulatory standards, as numerous residents had been "vulnerable to high-risk companies and frauds." This was based on conversations with U.S. government officials, including a proposed US-UK cross-border sandbox from Securities and Exchange Commission official Hester Peirce.

Today’s announcement conveys a strong message: Britain is welcoming businesses — yet remains resistant to fraud, exploitation, and volatility," stated the notice. "At the soonest possible time, the government intends to introduce definitive cryptocurrency laws after consulting with industries on the proposed regulations.

Related: UK trade organizations urge the government to designate cryptocurrency as a 'strategic priority'

The Treasury and Reeves stated that the UK aimed to position itself as a "world center for digital asset technologies," echoing the objectives set forth by the preceding administration under the Conservative Party. In a consultation document released in 2023, the Treasury suggested “regulating a broad spectrum of crypto-activities” — which included trading and issuing stablecoins —in accordance with UK regulations.

Praise from industry

Ian Silvera, who serves as the associate director of the self-governing trade group CryptoUK, told Cointelegraph that the government’s declaration was seen as "highly welcome and a significant triumph" for cryptocurrency companies. Nonetheless, he noted that further clarification regarding regulations on liquid staking and decentralized finance (DeFi) would be advantageous for the sector as well.

Although significant strides have been made in regulation by the [Financial Conduct Authority], which released its cryptocurrency blueprint towards the end of last year, the UK government initially pledged to become a leading international center for cryptocurrencies back in 2022," stated Silvera. "Since then, advancements have been somewhat sluggish; however, as acknowledged by the Chancellor, the integration of this sector into everyday life continues steadily. Currently, 12 percent of all British adults possess some form of digital currency, compared to just 4 percent in 2021.

The FCA set to release concluding regulations In cryptocurrency at some point in 2026, laying the foundation for the UK regulatory framework to be implemented. The path toward increased regulatory transparency in the UK might mirror that of the European Union, which started to implement The MiCa framework for crypto-assets was introduced in December.

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