The UK government has announced its intentions to increase its oversight of crypto assets as part of its efforts to combat economic crime in the country.
According to a policy paper released on March 30 by the UK Treasury and Home Office, the government aims to implement strong regulations to prevent the illegal use of digital assets.
This regulatory focus is a part of the government's economic crime plan for the years 2023 to 2026, which also involves coordinating law enforcement agencies to improve the process of seizing and storing crypto assets involved in legal proceedings.
The plan states that despite the challenges, implementing effective regulation of crypto assets in the UK will make the country an appealing destination for crypto assets and innovation globally. The plan aims to benefit everyone involved, including consumers and companies, through robust regulation of crypto assets.
The UK government expects criminals to move their crypto transactions to less regulated exchanges and services in other countries, according to a policy paper. To combat this, the UK Financial Conduct Authority (FCA) will collaborate with international counterparts to exchange information related to regulating and supervising crypto assets.
The National Crime Agency's National Assessment Centre estimates that illicit crypto transactions linked to the UK amounted to at least £1.24 billion in 2021, which is about 1 percent of the total transaction value, but there is a realistic possibility that it could be significantly higher.
As a part of its action plan, the UK government intends to work with different agencies to implement the Travel Rule of the Financial Action Task Force and pass the Economic Crime and Corporate Transparency Bill by Q4 of 2023. The government also plans to enhance communication between the Financial Conduct Authority (FCA) and crypto firms by Q2 of 2024.
Apart from law enforcement and regulation, the UK government is also focused on ensuring taxpayers in the country comply with reporting requirements related to crypto assets. To this end, on March 15, the UK Treasury revealed plans to modify self-assessment forms for crypto assets for the tax year 2024-25.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash