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UK to implement regulations to the Crypto space

Over the last few years, cryptocurrency has become one of the world’s largest trading platforms. The whole cryptocurrency trading space is currently worth just over $2 trillion. Due to the expansion and consistent growth of the space, governments are now trying to regulate it. The government of the United Kingdom have recently come forth with the proposition to implement a new set of regulations to ensure the “financial safety” of investors involved.

In this article, we will review the impact of implemented regulations by the United Kingdom and other countries around the globe and what effects they might have on the Cryptocurrency space.

Introduction to new regulations and their implementation

The basic aim of the new regulations is to strengthen rules related around cryptocurrency advertisements. Government officials say that there has been a spike in scams and misleading advertisements. Hence, the government’s hands were forced to take some strict steps to ensure the safety of citizens when dealing with cryptocurrency, and related adverts.

Newer laws legislate these misleading cryptocurrency advertisements. This new legislation will bring coherence between cryptocurrency and other financial advertisements ensuring that any cryptocurrency adverts are accurate and not misleading towards the public. Governmental rules are aimed to enhance consumer safety. Despite the new regulations being put into place, the government has cleared the speculation that the regulations are put in place to hinder actual cryptocurrency trading. Chancellor of the Exchequer, Rishi Sunak said: “Crypto assets can provide exciting new opportunities, offering people new ways to invest and transact – but it’s important that consumers are not being sold products with misleading claims.”

“We are ensuring that customers are protected, while also supporting the innovation of the crypto asset market.” HM Treasury

Benefits of the new laws

These laws are related to regulating and monitoring “qualifying crypto assets.” The FCA will formulate and implement the rules the same way as it does for other financial promotions, such as stocks, shares, and insurance products. Regulating crypto-related advertisement is one of the main goals of these new rules.

Crypto-related ads often minimize the potential risks and show unrealistic and overstated benefits of crypto trading. Thus, to make the citizens aware and protect them from falling into the trap, the government will check on crypto-related ads, to keep retail investors safer and make more educated steps into the space. Rules are created to ensure the protection of less aware citizens who may be trying to get involved. Most people fall prey to misleading cryptocurrency advertisements. They are not aware of the high risk factor that is associated with crypto-trading. Thus, these rules are meant to enhance financial safety of citizens and make sure that are aware of all the risks before they invest their money.

The businesses around the crypto trading space will have to be more transparent and forthcoming about their policies. Firms must be more careful about making unrealistic claims in their ads to attract people to crypto trading. This means that crypto businesses with all the correct regulations and legislations in place will be positioned better than those who are not, as the new regulations may cause complications for the businesses who do not have the correct practices in place later down the line.

If you own a crypto-trading business, here at Simply Crypto Hub, we provide services to help you improve your project and ensure that your business has all the correct legal requirements in place to create a regulation sound company. Whether that be security requirements to business planning and the implementation of procedures. We have an expert team with all the necessary skills to assist your business with the implementation of services. We study the current situation and stay up to date with all the recent changes in crypto space. You need not worry about getting caught by changes in the laws and regulations within the space. Our website and service offers will ensure that you do everything by law and guide you through the regulatory process.

Worldwide trends about cryptocurrency regulations

As cryptocurrency becomes increasingly popular every day, governments worldwide are adapting and learning more about them and how they can take control of these digital assets to benefit them.

Although crypto is becoming more popular by the day, mainstream adoption is still yet to fully take charge. Many governmental bodies across the world do not fully understand it. Hence the solid standpoint on implementing, their own regulatory measures on the asset class. Countries such as the USA, Canada and China have all put or began to put regulations in place so that they can try and control the class and gain a grip over it.

Here is a summary of the cryptocurrency regulatory state in different countries as of now.

The US remains one of the more crypto-friendly jurisdictions in the world and has generally maintained a progressive disposition to its regulation.

There has been recent development at state level. Some states like Iowa and Maryland have issued cautions to the public in dealing with cryptocurrencies. They have also prohibited state agencies from accepting cryptocurrency as a form of payment. However, states like Colorado and Wyoming have acknowledged crypto as an instrument of monetary value. Ohio recently started accepting payment of taxes in cryptocurrency.

Different agencies have taken different approach to the definition of cryptocurrencies and its regulation. The Securities and Exchange Commission (SEC) views cryptocurrency as a security. While the Commodity Futures Trading Commission (CFTC) calls Bitcoin a commodity. The Treasury department calls it a currency. IRS treats cryptocurrency as “assets” for taxation purposes.

The White House is reportedly preparing an executive action that will instruct federal agencies with regulating cryptocurrencies ‘as a matter of national security.’ The order would assign agencies to analyse the various forms of digital assets and create a framework for regulation, The idea is to create a set of policies that are in line with the government’s plan for the space.

Canada has a proactive stance towards crypto trading. In 2021, Canada became the first to allow Bitcoin Exchange-Traded Funds (ETF). Moreover, Canada’s Investment Industry Regulatory Organization (IIROC) has clarified that crypto trading dealers and platforms must register with provincial regulators.

China is one of the greatest economies in the world. However, The People’s Bank of China (PBOC) has banned crypto exchanges from operating in the country. They say that crypto trading facilitates public financing without approval. China has also placed a ban on Bitcoin mining. However, they remain the nation with the largest cryptocurrency mining output.  The world’s top Bitcoin mining pools all came from China with five pools being responsible for over half of the cryptocurrency’s total hash.

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The rise of NFTs

NFTs have been gaining masses in popularity over the course of 2021 from CryptoPunks to BoredApes selling for crazy prices of up to $500 million, what are they and what do they do?

NFT stands for Non-Fungible Token, and this means that it is unique and cannot be replaced by something else. For example, it is like a one-of-a-kind trading card. They can be anything digital, such as art, music, videos, photos, gaming items and even tweets. They work by being part of a blockchain such as Ethereum or Solana for example. These blockchains allow for extra information to be stored in the shape of NFTs, which makes them work differently from their respective tokens eg ETH, SOL. Blockchain technology is used to establish the uniqueness and ownership of a piece of digital art, which is then sold via a platform. 

NFTs are nothing new, in fact, they have been around since 2014. However, their popularity has skyrocketed during 2021 seeing over $2.5 billion sales in the first half of 2021 alone. Major brands such as McDonalds, Coca-Cola and Nike have all began to jump on the NFT bandwagon which is helping to exponentially grow the space.

NFTs give artists a way to sell work that there may not otherwise be much of a market for. Also, NFTs have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets super popular and increases in value, you’ll see some of that benefit. One of the benefits of buying art is it lets you financially support artists you like and give a great opportunity to make investments into NFT projects that can give you a great return on your money.

In conclusion, NFTs have a huge range of possibilities for the future. These digital assets have a great capacity to represent real world items and can become game changers in the gaming, music, sports, and fashion industries. In the future, other platforms within the crypto space and the real world will begin to adopt and support NFTs as they continue to grow in popularity. They already provide considerable promise for the future as they give creators and users huge benefits that have never been seen before which is why NFTs will see more and more artists eagerly enter the sector.

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